Smart Tech For Smart Retailers
published by A1 Retail Magazine,
December 1, 2021
How are smart technologies such as artificial intelligence (AI), machine learning (ML) and augmented reality (AR) changing the shopping experience in-store and online?
In an era of supply chain issues and shifting consumer behaviours, smart technologies like artificial intelligence (AI), machine learning (ML) and augmented reality (AR) can help retailers and brands to adapt quickly to the rapidly changing retail landscape.
Will Shepherd, Managing Partner at REPL Group, part of Accenture, comments, “Customers now expect a rich and personalised experience in-store and online. For retailers to provide this, data-fuelled infrastructure, advanced analytics and cloud-based systems are required to provide actionable insights across businesses. AI and ML clarify complex organisational challenges, enhance efficiency, and ultimately improve the seamless customer shopping experience, helping accelerate revenue growth.”
Will continues, “This starts as early as the supply chain – a critical component of a retailer’s ability to meet customer demand. In response to the pandemic-accelerated boom in eCommerce, firms are having to invest heavily in warehouse solutions – they are also automating as much as possible to navigate social distancing recommendations and looking to smart warehousing for quicker responses and more accurate inventory information. Implementing these technologies in-store and in warehouses alike will provide retailers with a superior knowledge of their own stock, staff, and operational capacity, as well as deeper insights into their customers.
Adopting AI and ML throughout a retailer’s business operations allows them to be hyper-responsive to changes in demand and predict market shifts. As the retail landscape continues to evolve, the use of AI and ML to utilise business data will be the difference between those that adapt and survive and those that falter.”
When it comes to online shopping, AI can be used to help customers find exactly what they are looking for, and quickly. Jesse Michael, Vice-President Sales & Customer Success at Adeptmind, explains, “The search function has become an indispensable part of online shopping, but we rarely stop to think if the experience could be improved. This is an area where AI has clear implications for the world of online retail.
While a retail assistant inside a physical store might be able to ask follow-up questions to help customers find the right product, website search functions are imprecise and often incorrect. Simple search algorithms have no way of understanding the nuances and complexities in human language. AI, however, can go further. Specifically, Deep Active Learning can train search algorithms to anticipate what customers actually want when they enter search terms.
This works by processing huge amounts of written data from a variety of sources – for instance online reviews, social media, or an individual customer’s data footprint - and building networks of associations between words and phrases. This frees search functions from being tied to catalogue data, so the next time customers search for a “jean shirt”, they will be directed to denim shirts, rather than a hopelessly confused mix of trousers and tops.”
Consumers use eCommerce for convenience, but it can have its drawbacks, Jesse adds, “People are increasingly time poor, and less inclined to sift through reams of products to find the right one. Predictive AI solves this issue, improving the customer experience and in turn generating more sales for retailers. Following implementation, sales and conversions typically increase by double digits and sometimes upwards of 30 percent, according to our own data. And in a retail environment where products are often returned, accurate search technology creates a more sustainable eCommerce ecosystem overall.”
These technologies can also be used to draw shoppers’ attention to a retailer’s website while browsing online. Jeremy Brown, Chief Technology Officer at OCUS, comments, “In the drive for retailers to create arresting images to capture consumers’ increasingly divided attention online, AI is the next great frontier. Predictive analytics on a large scale can reveal how customers react to certain types of images, draw conclusions and make recommendations with an astonishing success rate. In the split second that a customer may see a product while scrolling on a smartphone, retailers need to exploit every marginal advantage to grab their attention, and it begins and ends with images. This is where AI comes into its own.”
Jeremy explains, “This relies on algorithms trained using machine learning to detect the contents of an image and sort it by type. Once the analysis is done, various data – such as impressions, click through rate, and conversions are integrated – AI models are then used to suggest which types of images will perform best in the future. This type of advanced data science quickly becomes indispensable for multinational retailers operating in image-led industries that might need to generate upwards of 50,000 photos a month.”
Jeremy adds, “At OCUS, we’ve found that using AI to perform this sort of image analysis has drawn some surprising conclusions. For example, we’ve found that selling a taco in the UK is more successful if the food product is presented next to a portion of chips, whereas in France, the opposite is true. AI can generate this sort of surprising insight into consumer psychology that humans would never be able to. But looking beyond the chips, AI is swiftly becoming indispensable for businesses in an online retail environment where time is short, distractions are many, and images reign supreme.”
As a result of the pandemic, eCommerce has grown massively over the past year, with many consumers converting almost completely to online shopping. Therefore, bricks and mortar stores need to reinvent themselves to stay relevant in the retail market going forwards – this is where smart technologies can help. Stefan Hauswiesner, CEO and Co-founder of Reactive Reality, explains, “As shoppers return to the high street, bricks and mortar stores need to become more centred around bringing excitement to customers - focusing less on delivering sales within the physical location and more about improving brand loyalty and engagement through a fun shopping experience. Connecting online and offline channels and creating a consistent level of service between digital and physical, will be a big theme, and AR has a key role to play here. By implementing AR technology that allows customers to view and try on clothes that are not currently available on-site, all via their own personalised avatar, stores will boost both sales and brand loyalty. The customer could then be provided with an online sign-in credential where their own avatar and in-store experience will be stored, allowing them to easily continue their shopping journey at home.”
Consumer engagement technologies like AI, AR and virtual reality (VR) are becoming increasingly popular within the fashion industry, Stefan adds, “Reactive Reality throughout the pandemic has been involved in setting up virtual fashion shows and virtual shopping malls, helping to sustain the industry during the pandemic and bringing these experiences to a much wider audience. For example, our platform enabled up-and-coming fashion designers to host virtual shows during the 2020 Milan Fashion Week.
Tools like PICTOFiT Shopping, our newly-launched mobile showcase app, are becoming essential for retailers to see how AR can significantly enhance their current offering before implementing it into their online store or app, providing them with a snapshot of how AR is bringing this hybrid shopping experience into the 21st century.”
More and more retailers are starting to take note and beginning to implement technologies such as AR in-store to fuse online and offline channels. Stuart Brazier, Creative Innovation Director at Big Group, comments, “There is now a coming together, a blurring of lines once so clear. The mass adoption of technology has been a key driver in this, but it is the technology itself that is having a transformative effect on how the retail sector is evolving.”
Stuart adds, “As an example, this year, we helped Kenwood Limited, a global brand leader in food preparation products, imbed AR technology into their POS. One of the problems AR helps brands solve is its ability to show a range of product options in a relatively small space. This works particularly well for products with multiple colour options. Kenwood used AR to give shoppers the capability to engage with different colour variations on their new Titanium Chef Baker stand mixer which features interchangeable colour PopTops (sold separately). With the help of AR, Kenwood drove a positive customer experience, but also offered shoppers something more innate, they offered the consumer choice.”
What’s more, the benefits of these technologies to the customer experience are being recognised more and more by shoppers. Simon Hathaway, MD EMEA at Outform, tells us, “Research we conducted in September showed that half of us feel it’s important to try before we buy in categories like beauty, so shoppers have clearly readopted physical testing without qualms as we come out of lockdown. The same research also revealed that 21 percent of beauty shoppers find AR useful in-store.
It’s clear from this that AR has the potential to be more than an add-on, adopted only on a needs must basis. It’s an unrivalled product discovery mechanic that highlights product attributes and encourages consumers to experiment in different categories - with the caveat that it’s used appropriately and is genuinely useful. Meanwhile, AI will be invisible, bringing personalisation and convenience that will be at the heart of unified commerce and the new retail utility.” Simon concludes, “Done well, both can be a key part of the digital handshake, connecting in-store and online in a way that shoppers understand and buy into. They facilitate a discovery process that leads to a wider, more open physical shopper journey, regardless of where shoppers ultimately check out. It’s also the start of an education process that could make technologies like AR and AI more ubiquitous in-store, to really enrich the consumer experience and make it future fit.”