How Artificial Intelligence is redefining Retail - HSO
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HSO.COM
How Artificial Intelligence
is redefining Retail
A LAND OF OPPORTUNITY The smartest retailers are already taking advantage of GETTING PERSONAL
the data they hold, building the models and embracing
Today's UK retail environment is arguably tougher Retail personalisation is about providing each
the technologies they need for future success.
than ever. There are continual pressures to cut costs individual customer with the most suitable product
and do more with existing resources, in an industry or service. Much of this process is achieved through
One of the biggest opportunities for competitive
already renowned for tight profit margins. personalisation... and AI sits at the heart of this.
advantage is Artificial Intelligence (AI) which looks
set to transform the entire shopping experience over
Recent economic influences like the national living We've already seen the impact AI powered
the next few years. As such, retailers predict they will
wage and the low value of the pound are making these personalisation has had on the success of innovative
invest heavily in relevant AI tools to improve operations
margins tighter still, and leaving traditional operating businesses such as Amazon, Netflix, ASOS, AO.com,
and enrich the customer experience.
models even more vulnerable to new entrants from Purple Bricks and many more. However, it's in the
all over the world with innovative, online processes coming years that AI will go mainstream and really
“We believe that AI can deliver business value through
tailored to the modern market. make its mark.
making better products, faster, cheaper processes
and more insightful analysis.” - David Harris, SVP of
But despite these harsh realities, the future still looks Given the rapid rise of online technologies and
IT, Burberry
bright. This is because modern commerce is driven heightened consumer expectations, physical stores
by data: and retailers have access to large volumes of have had to evolve and adapt to a new marketplace
In this whitepaper we look at how retailers are using
it. With the potential these days to access significant and model, built on digital.
AI applications to stay ahead of the curve today, and
computing power, they have the ability to harness this
what innovations are being pioneered as potential
data, and use it effectively to benefit their businesses.
retail game-changes over the next few years.
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Article How Artificial Intelligence is redefining Retail
AI is part of the backbone of this transformation, and retailers are becoming increasingly more capable of
AI powered retail experiences will become essential to learning customer behaviour in real-time, enabling
satisfy and retain customers. them to shape recommendations and interactions in
response.
"AI is going to be like electricity or the internet -
foundational technology [on] which most things are 70% of U.S. millennials appreciate a retailer using AI
built...It takes stuff that we’ve been doing for so long tech to show more interesting products.
and it makes it better than the sum of its parts.” - Frontierless Retail, JWT Intelligence, 2016 – in MS AI
- Kyle Nel, Executive Director, Lowe’s Innovation Labs retail playbook)
AI: INFLUENCING EVERY INTERACTION AUTOMATED ASSISTANTS
Today’s shoppers expect a seamless experience, AI-powered conversational assistants will play an
tailored to them. Retailers must satisfy customers increasingly influential role in enabling retailers to
immediately, and give them the option to engage in establish emotional relationships with their customers.
whichever way they want to at a particular moment: be it Using natural language processing, chatbots enable
on social media, SMS, phone or otherwise. In response, shoppers to effortlessly discuss questions and explore
forward-thinking organisations are recognising every product options prior to purchase.
individual customer, and evolving their communication
to reflect nuances like current demographic context, This human simulation enhances the overall customer
previous purchases and shopping behaviour. experience, ensuring real-time customer service with
an attentive and personal feel, and offers retailers
AI is crucial to this process. It analyses and self-learns additional opportunity to drive sales and conversions.
by tracking a user’s digital experience and creating
relevant responses to every unique interaction. In Interestingly, chatbots aren’t limited to e-commerce
retail, we can see this emerging in a number of ways: but are predicted to also become useful in physical
stores where they are expected to make the in-store
TAILORED PRODUCT RECOMMENDATIONS experience more efficient.
In today’s fast moving world, time-strapped shoppers By recognising and interpreting facial, biometric
are increasingly looking to retailers to highlight relevant and audio signs, AI interfaces will be able to shape
It's estimated that global retail products and services to suit their needs and desires, activity based on individual shoppers’ personalities
both in-store and online, and are happy to exchange and behaviours, and promote specific products and
spending on artificial intelligence personal data for the promise of progressively relevant experiences, rewards and incentives based on these
shopping experiences. insights.
will grow to $7.3 billion per
Recommendation engines use powerful machine PERSONALISED STOREFRONTS
year by 2022, up from an learning algorithms to collect data points from each
customer during the path-to-purchase, and use these This attentiveness will go beyond the human aspect, to
estimated $2 billion in 2018.1 to learn and adapt over time. Equipped with these tools, include the entire store environment2. AI will help create
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Article How Artificial Intelligence is redefining Retail
intelligent retail spaces, which recognise shoppers EFFECTIVE FRAUD DETECTION
through biometric recognition and adapt to appeal to
Shop floor monitoring looks for unusual patterns
them with elements such as dynamic product displays,
in behaviour, and possible suspicious activity. For
pricing and services. The result will be a truly end-to-
example, a customer returning a lot of items in a short
end customised shopping experience.
space of time, always returning items at similar times
such as on the same day of the week, or always asking
EFFICIENT ORDER ROUTING
for cash refunds, and so on.
With convenience well-established as an important
point of differentiation for shoppers, today's customers AI will open the door to a far more exact and in-depth
are likely to engage with anything that further empowers monitoring system for identifying these anomalies and
them to receive goods and services on their terms, in exposing fraudulent behaviour and transactions.
the shortest possible amount of time.
HSO & AI
AI will further optimise existing storage, distribution
Undoubtedly, current and emerging developments in
and warehousing processes associated with supplying
both data analytics and AI technologies are enabling
products in a timely and accurate fashion.
retailers to truly put their customers at the very centre
DYNAMIC PRICING of their business. Far from replacing physical stores or
traditional models, AI is opening them up to exciting
AI's real-time insight and data-driven analytics will new possibilities, with unprecedented and exciting
provide retailers with an up-to-the-minute overview of opportunities to gain commercial advantage.
how competitors are promoting comparable products.
Of course, AI technology itself is still at a relatively early
Based on variables such as delivery times, stock levels stage, but we know that it is advancing every day, and
and availability, this will give retailers the freedom to that such possibilities are just a short time away. So,
adjust pricing to maintain maximum profit margin as a retailer in this volatile environment, it's important
while maintaining customer demand. to be ready for anything that comes down the line.
SMOOTH SUPPLY CHAIN HSO is well-placed to help you on your AI journey.
AI-supported logistics can manage a retailer’s Indeed, through our extensive experience with
inventory, staffing, distribution and delivery systems Microsoft Dynamics, we're already involved in projects
in minute detail, to ensure optimal efficiency at every that harness the power of AI technologies and derive
single step of the process. the full value of data by using it in the cloud. We can
help you discover and create a pathway to innovate and
Any potential pitfalls, such as bad weather or traffic accelerate your digital transformation, by introducing
delays, can be flagged in advance so alternatives can intelligence and deploying the right tools and services
be offered and implemented. As a result, retailers throughout your business.
can achieve operational excellence across the supply
chain. Contact us to find out more. We'd love to hear from
you.
Page 3 of 4ABOUT HSO
Underpinned by 25 years of industry and Microsoft Dynamics expertise, we’re enabling some of the largest retailers in the world to connect complex business
functions and deliver a truly customer oriented experience.
Learn more at www.hso.com
ABOUT MICROSOFT DYNAMICS
Microsoft Dynamics makes it easy for retailers to operate across multiple locations and countries by standardising processes, providing visibility across the
organisation, and helping to simplify compliance.
Visit HSO.com to discover more about Microsoft Dynamics 365 for Retail.
SOURCES:
1
Juniper Research
2
Retail Dive
3
Microsoft
E: info-uk@hso.com 1st Floor, Green Park,
HSO.COM
T: +44 (0) 20 3128 7767 100 Brook Drive Reading, RG2 0TD
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