Technology is poised to change the way we shop, with exotic experiences from in-store personalised adverts and chatbots, to augmented reality displays and prices which adjust in real-time. The driving force behind this change will be the implementation of artificial intelligence (AI).

In today’s retail world, customers expect personalised experiences – and will spend more if they get them, according to McKinsey. They will also be receptive to shelf-level advertising if it’s done in an informative and entertaining manner. To deliver on these high expectations, physical retailers need to know more about their customers. This is where the real power of AI comes in, providing results in several key ways.

Per Overgaard, CTO EMEA, Lenovo ISG
Per Overgaard, CTO EMEA, Lenovo ISG

By deploying AI in stores, retailers can enable new customer experiences such as autonomous shopping. Analysing in-store data also empowers them with the information needed to deliver dynamic pricing and real-time promotions, as well as answering the big questions around what shoppers are looking at, what they are buying, and what they will buy next to the benefit of all of us since the personalised buying experience is crucial for consumers.

AI can also break down the barriers between different channels, enabling retailers to take an omnichannel approach to understanding their customers, and deploying technologies such as conversational AI to both in-store and online experiences.

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Behind the scenes, AI can also play a key role in improving the supply chain. By applying AI analysis, business leaders can improve everything from forecasting to routing optimisation. ‘Smart warehouses’ can help keep track of inventory, linking stock levels to real-time purchasing trends, and making the whole business more efficient.

Smarter shopping

The technology that will light the spark for this change is available now. It exists in the cameras already in retail stores combined with the power of AI and edge computing, which helps bring data storage closer to the source to enable quicker processing and achieve faster results. American retailer Kroger is already pioneering this technology, with powerful edge AI servers in its stores which are helping to deliver the future of self-checkout. The servers are connected to high-resolution cameras in-store. An AI application monitors shoppers as they check out, running on edge servers which work in real-time.

When the edge servers spot an error, which could be anything from non-scans to ‘product switching’ where shoppers swap stickers to scan expensive items as cheaper ones, the system reacts immediately. If a customer triggers an error, they’re given a real-time ‘nudge’ in the form of a five-second video displayed on the point-of-sale terminal. If they don’t respond, a shop assistant is notified.

This is made possible by servers which can process inputs from 20 cameras at once in real time. The cameras help Kroger deal with theft, but also keep track of inventory – and the technology has huge potential right across the front and back-end of retail businesses. By connecting edge AI to in-store cameras, retailers may soon be able to check that deliveries match exactly what was ordered. When customers ‘click and buy’, AI cameras could ensure they leave with the right goods. Such systems make it easier to track stock and understand demand. Harnessing AI and edge computing offers potential far beyond simply dealing with problems such as theft. It can deliver customer insights that will transform the whole business, empowering retailers with the knowledge they need to improve store planning and place goods to drive increased sales.

Bringing retail to life

Just about every store already has cameras, but the footage being captured is barely being used – it’s used as evidence when an incident occurs, but for little else. An edge system, combined with the power of AI, can rapidly turn this footage into tangible business value. Simply by plugging a video feed into an edge server GPU, the system can deliver the information required for valuable shopper behaviour analytics, allowing retailers to deliver instant personalised advertising, real-time promotions, and dynamic pricing. All of these can increase purchases and drive revenue.

AI can also be highly powerful in helping retailers ‘join the dots’ and build an omnichannel approach. This comes by linking data from ecommerce with retail data, helping to build a ‘Customer 360’ view to deliver improved experiences. When it comes to customer service, AI chatbots will become increasingly important, both in-store and out, helping to break down the barriers between offline retail and ecommerce. These interactions will continue to paint a full customer picture.

Analysis of employee behaviour can also help business leaders drive productivity and optimise staff schedules, while the cameras can also help protect employees from threats and ensure stores aren’t overcrowded. Edge computing works in synergy with AI here, offering retailers a way to process this information at the point of interaction, delivering information where it’s needed, fast.

Behind the scenes

This powerful combination of AI and edge computing also has applications well beyond the shop floor. Analytics from warehouses and stock rooms can allow retailers to be more efficient about ordering products, restocking shelves, and planning logistics effectively.

The more this data is shared between different parts of the business, the more valuable it becomes. If real-time stock levels are linked to shop floor data about purchasing trends, these insights can help the whole business to become more efficient and more streamlined. For instance, retailers can use data to understand the average amount of customers who enter the store at different times throughout the year, and stock their floors accordingly to match this demand. This is a key differentiator for successful retailers in the lead up to busy periods, such as Christmas.

In warehousing and supply chain, AI can help with everything from optimising routing and cold chain to inventory and warehouse management. AI analytics can ensure that products arrive faster and fresher, and empower business leaders with the ability to anticipate problems, while also reducing waste.

AI and the future of retail

Taking advantage of real-time data and analytics is what will decide the winners and losers in the retail sector. Forward-thinking business leaders who take advantage of AI and edge technology to harness data will be able to deliver the personalised experiences that customers crave, while also improving efficiency across their business. The benefits of data go far beyond the day-to-day operations of a business, unlocking insights which can lead to entirely new revenue streams.

AI is a technology that is having its moment in the sun – and for retailers, the time to embrace it is now.

Per Overgaard CTO EMEA Lenovo ISG Sq
Per Overgaard
CTO EMEA at Lenovo ISG | Website