What Can Artificial Intelligence do for Retail?

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Retail analysts say artificial intelligence will soon be used to help retailers excel at what they do. Bill Bishop expects grocers to go beyond analytics in 2018. At least a dozen companies are looking into how to use artificial intelligence to streamline their processes, said Bishop, the chief architect at consulting firm Brick Meets Click. Learning how to get the most out of the technology will take some time, Bishop said, but the interest is there. Developing promotions is one area where artificial intelligence may be able to deliver better results than people. Relying on purchase data, the technology is objective and can quickly identify correlations. Ideally, artificial intelligence can answer questions like the following:
  • How does the promotion of a particular apple variety affect sales of other apple varieties?
  • How does the promotion of that variety affect sales of other varieties when the promoted one is in a standalone display versus when embedded as part of a larger display?
  • How does the promotion of that apple affect pear sales?
  • How does the promotion of that variety affect sales of ingredients in a pie recipe posted with the display?
  • Overall, what products see sales rise or fall in conjunction with the promotion of this variety?
  • “Artificial intelligence allows you to look to the left and look to the right and kind of net out the effect of those things.” Bishop said.
  • The technology also allows grocers to run simulations and project what sales outcomes will be based on the pricing, positioning and ad size for various products.
“I think that artificial intelligence does two things — it frees people up from drudge work, and it goes into areas they didn’t even think about going,” Bishop said. North Carolina-based retailer Earth Fare reported this year a positive experience using Daisy Intelligence, and Bishop said he discovered numerous other grocers are exploring options. “There’s more than I would have ever guessed,” Bishop said.

Other innovations coming in 2018

Diana Sheehan, director of retail insights for Kantar Retail, envisioned advances in several other areas for 2018. She expects more “dark stores” will fulfill online orders, particularly in rural areas where people have to drive a significant distance for groceries. Sheehan also predicts more voice-enabled commerce — orders made using Alexa and Google Home devices. Like Bishop, she anticipates retailers will delve deeper into artificial intelligence. “Today in some stores you actually have AI and machine learning and smart shelves helping store managers understand when they’re out of stock and turn that around quickly, much more quickly than they have in the past,” Sheehan said. “That kind of using the technology for logistics is going to move forward and evolve.” Sheehan also noted that grocers could use digital merchandising tools in fresh departments — screens that show videos or provide information, for example — that have started popping up in retail sectors from sporting goods to beauty. “It’s the idea of, look, if we have to compete against websites, which are interactive and have content, why not make part of our store look like a website?” Sheehan said. A monitor by a produce display could show consumers what to do with a jackfruit or how to determine when a melon is ripe, she suggested, adding that many shoppers want to try unfamiliar items but need encouragement. “Particularly in produce, it’s actually one of those places where you kind of stick with what you know, and for a lot of us, we don’t know a lot outside of what we’ve grown up with, and that’ll be different for different people,” Sheehan said. “But generally speaking you’re not always the bravest, particularly in preparing fruits and vegetables that you’ve never done before.”