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How Artificial Intelligence Can Impact Retail
INTRO: As more retailers digitally transform their businesses, artificial intelligence-based software is becoming a must have in the industry. Process automation, data analysis, and data management are must-haves to scale a retailer.
SUMMARY: Retailers looking to scale and optimize their business processes should turn to artificial intelligence to streamline operations.
Retail has always been the industry with the highest competition. It's fast paced, and retailers are always looking for new ways to optimize their workflows to increase returns. Businesses can stay competitive by investing in cutting-edge technologies.
The latest technologies are leaning toward e-commerce development as online sales continue to increase. That's a logical progression since paying online is fast, and you don't need to spend time on customer service.
Artificial intelligence (AI) and other leading technologies are must-haves for retail entrepreneurs looking to scale their business operations.
How Artificial Intelligence Can Impact Retail
• AI introduces new technologies into the retail industry
• Robots can automate repetitive processes
1. Cashiers
2. Accounting tasks
3. Data sorting
• AI can analyze data to help develop new solutions
1. Process mining
2. Computer vision
3. Buyer behavior recognition
AI Introduces New Technologies Into the Retail Industry
There are several emerging technologies that retail businesses use today to optimize their operations. To list a few:
Smart contracts that allow companies to manage deliveries and store goods
• VR and AR
• Blockchain
• Cryptocurrency
• Big Data
• Internet of things (IoT) devices
Big Data and IoT technologies, in particular, are developing at a breathtaking pace. Manufacturers are increasingly producing smart devices that can connect with each other.
In retail, this is widely used to automate manual labor. In progressive companies, you will not meet a person who performs routine tasks – instead, those tasks are relegated to a software or machine.
Robots Can Automate Repetitive Processes
Robots have an edge over their human counterparts because they can work 24/7, don't get tired, and are less likely to produce errors for repetitive tasks. Here are some processes that retailers are automating with robots.
1. Cashiers
In the near future, cashiers will be replaced by either smart machines or well-known self-service ticket offices, which have already been tested by many retail chains. Smart cash registers have allowed businesses to reduce their number of cashiers by threefold. Full payback of the equipment typically occurs in 6 months.
2. Accounting Tasks
Besides high-level accounting, these tasks include workers who count and sort cash from cash boxes. This operation is easily automated through the installation of an automated cash counting device. The box from the cash register is placed directly into the system and independently processes the cash.
The speed of work is amazing — the device is able to process more than 3,500 coins per minute! Staff assistance is not required, and revenue data is automatically transferred to the enterprise resource planning (ERP) system.
3. Data Sorting
Warehouse operations also involves a fair amount of routine work, which takes a lot of time. Although human resources are limited, machines are able to perform any task 24/7. Therefore, warehouse robotics in the retail sector is considered one of the key areas of development.
Global trends show that optimizing routine operations significantly increases warehouse efficiency. A good warehouse management system (WMS) can process more than 2 million warehouse operations per day. And, with the help of technologies supporting barcoding, voice control and QR-code reading, the speed of data processing can increase several times over.
For example, not long ago, our team at Omega-R was approached by the world's largest supermarket chain. They needed a solution that would allow them to quickly and comfortably handle the flow of orders sent through the online store. It also needed to speed up and automate the process of collecting products.
We developed an internal tool that automated item collection, packaging, and delivery.
Our solution has a special ring that reads barcodes from packages and goods. Product data received from the ring via Bluetooth comes through the REST server. Then, there is an exchange of information.
To summarize, our application allows warehouses to nearly double their employees' work speed.
I should note that our retail client did not see the need to replace human labor with machine labor. Remember that routine automation is only a small part of the introduction of technologies in retail.
AI Can Analyze Data to Help Develop New Solutions
Not only can you automate routine operations, but you can also automate the execution of larger tasks.
AI is able to learn complex tasks: it remembers all of the structures, interactions, and patterns of an operation and forms an error-free algorithm that accomplishes the same. This can make your life a lot simpler!
Moreover, AI does not need to be trained since it can do it on its own. This is AI's key advantage. Let's take a look at some of the different ways AI can help retail businesses.
1. Process Mining
When companies have a lot of business processes that are hard to sort through, process mining technology can help.
Process mining technology analyzes received data and reveals insights that might be hidden from a manager's eyes such as:
• Workflow loops
• Delays in the workflow
• Lack of qualification of employees
• Work progress
In larger cities (population of over a million), shopping malls have long used process mining technology as a way to improve the buying experience. It allows you to imagine the way the customer interacts with the store and identifies weaknesses in sales.
In fact, this is a special approach in data analytics. It's able to do a tremendous job of increasing sales, reducing costs, improving the efficiency of business processes, and monitoring and predicting results.
2. Computer vision
It is no secret that modern technologies allow computers to recognize faces and images. But how can this be used in retail?
Computer vision technology can automatically recognize an image and match it with a loaded template (or, in other words, a planogram). These templates contain information about product displays.
When a merchant uploads a photo of their exposed shelves, the program automatically informs him of unoptimized displays or missing goods. Computer vision is a way to facilitate and accelerate how businesses plan their displays.
You can also grant your computer vision tech access to your warehouse database to advise you on what goods needs to be added or replaced. Studies have shown that the introduction of computer vision technology can reduce the time of the merchandiser by 40% and increase turnover by 5%.
3. Buyer Behavior Recognition
AI allows you to get to know your customer better. It's able to count the number of visitors, the number of converted and repeat buyers, determine their gender, age, physical characteristics (height and weight, for example), race and more.
Based on all of this data, you can predict customer behavior and increase sales.
For example, you could analyze the actions of your buyer to determine how they behave in your store. Then, you could organize your store space so that people would spend more time browsing. This provokes spontaneous purchases and significantly increase your average check-out.
When you consider that more than 80% of people buy under the influence of momentum, the benefits of this technology for retailers is obvious, especially for those who trade offline. According to statistics, 8 out of 10 spontaneous buyers prefer a virtual store to a real point of sale.
After analyzing the how businesses execute their marketing, we decided to create a system that would combine most (if not all) of the necessary marketing tools. It's the ideal B2B and B2C sector interaction system.
Our solution has various tools for segmentation, analytics, communication, creation of shares and personal offers. This will help any marketer identify the best ways to retain their client and adjust their user experience.
All analytics both for an individual client and for a group of clients as a whole is presented in the form of dashboards.
The dashboard displays data visually so that retailers can understand the status of their store at a glance and make quick decisions.
After 4 months of our client using our system, we evaluated the first results of the platform's effectiveness. The number of repeated purchases increased by 7%, the average check increased by 20 rubles, and additional revenue by 1 million. And this with an investment of only 40,000 rubles.
Consumer behavior recognition, computer vision, process mining – these are the key technologies that drive the retail industry. Perhaps this sounds like fiction, but large retailers are already using AI to automate business processes. And if you're not looking to invest in these technologies, then in the very near future you risk losing to your competitors.
AI Technology Can Save Resources by Automating Processes
In 2020, many retailers large and small will have to revise established business processes and learn how to create new ones that will meet all customer requirements.
Digitalization will continue to gain momentum, and the market will be determined by technologies that will help improve business efficiency and allow to remain successful in a highly competitive environment.
Therefore, it's important to understand that AI is a necessity modern retail. The main benefit of AI is the maximum extraction of useful information from a huge array of data. It can help automate routine operations, optimize workflows, and even analyze user behavior.
The right methodology and technology for obtaining information can determine the success of your whole business. Follow the latest trends and invest smartly in AI to improve your retail experience.
BIO: Alexey Rybakov, CEO of Omega-R, an international IT company, explains why artificial intelligence should be used in retail, how it can help surpass competitors, and why businesses should not be afraid of the latest automation tools.
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