Overcoming roadblocks retailers face when implementing AI

It may feel as if artificial intelligence has reached a critical mass, but it has not. In fact, it is only beginning to make an impact in some sectors, including retail. But according to results collected by KPMG, retail AI has room to grow – and much of it. And by 2027, AI in retail will balloon to $ 19.9 billion from about $ 7.3 billion in forecast spending in 2022, per capita. Careful research.

All of this, and only half of retail professionals believe they have scratched the surface of what is possible when technology meets personal shopping. So why the delay time despite AI’s potential? Blame it on the confusion surrounding AI in general.

What AI is – and is not

Many people do not understand AI conceptually. This leaves them less inclined to invest in the new technology, even though they see it working for e-commerce. Or they feel that AI is limited to robots that stock shelves.

AI is more straightforward than many retailers imagine.

In essence, AI algorithms are just “if-then” statements. As long as result parameters are set, the programming collects, evaluates and uses data correctly. And if-so, situations happen all the time in retail.

An example of “if-then” in retail

Say a grocery store is standing by the checkout. When more than three customers are lagging behind, the manager opens a new register to make customers happier.

In other words, there are hundreds, if not more, issues that arise in retail that managers need to address to keep customers happy and the process runs smoothly.

With AI, you can eliminate the need for the manager to stand and keep things going. Instead, large cameras or sensors can do the job instead. That way, managers can take care of other businesses during opening hours and beyond. At the same time, the data collected by the cameras could go through several if-then statements.

Whose the store is busy every day at 3pm and customers are angrily waiting in line, then we need more cashiers at 3pm every day.

To make data-driven decisions

Let’s take the situation a step further. The AI ​​sensor could store incoming data and measure the average waiting time for customers. These averages can then help the manager know when employees were most needed to take care of congested checkout lines. When do the most clean-up situations occur?

There is virtually no limit to the doors that AI software can open.

In Australia, AI fashion stalls measure customers’ body language and moods to come up with clothing suggestions. At Starbucks, AI is used to track best-selling brews and personalize specials. Which special offers do customers demand and receive the most?

Other retailers are improving their inventory management and working with “heavy lifting” machines in warehouses. Some stores dive deep into seeing if customers spend more when turning right or left when entering the store. If you know which island your customers spend the most time on, you can better plan for the cost of displays on those islands as well as promotional coupons.

Gearing up for AI in Retail – Roadblocks Retailers Face

One thing is for sure: AI can be a powerful retail tool. However, it is not without roadblocks. Fortunately, most obstacles to using AI technologies can be overcome by asking (and answering) a few questions.

1. Why do we want to use AI?

That might sound like a trick question. It is not. It’s ethical. Resellers need to be clear about why they want AI, and their answers need to make sense. Case in point: If they use AI to enhance the customer experience, it’s great. On the other hand, if they drive sales through AI-driven fear building, it is inappropriate.

Everyone needs a morality of the foundation of AI’s use. Its potential for good is so great. However, when used for the wrong reasons, it can do great harm. Therefore, the correct answer to this question must focus on service and safety.

2. Which of our processes could benefit from AI?

You can not explore all the possibilities of AI if you do not understand where your bottlenecks are. Consider when I was 15 and working at a fast food place. I changed the license plate regularly. How did I know what to write? Someone at the company would fax a note to my entire franchise owner. Then my manager would review the fax and give it to me. Not just a streamlined system, right?

With AI, a person can schedule a digital sign to go live or even program the sign to change based on everything from the time of day to weather conditions — for sale on the spot.

When considering implementing AI in your retail store, start by thinking about what your algorithms would look like in an analog way – get help if you need it – do not miss this opportunity. For example, where do you routinely collect and disseminate information? These are probably areas that can be accelerated if you handed them over to AI.

Who will help us implement our AI solutions?

As you pondered this question, you automatically thought, “an AI expert or IT person?” That’s what most retailers assume, but it’s not true. The best person to hire to help you with your AI applications is an expert in operational efficiency. This type of professional will strive to understand your business processes and store in order to design a satisfactory AI solution for your if-then statements.

You know you have found the right partner when you are hit by all sorts of additional questions.

These questions are likely to include queries about what kind of information you are currently collecting, what digital processes you may be able to automate, and how you intend to use AI-collected data to make improvements to your retail systems already in place.

Look forward to

It’s hard to say how far AI in retail will go. Nevertheless, it is clear that it is committed to changing the way consumers shop and how stores go about their day-to-day business. So even if you have delayed embracing AI retail solutions, now is the time to let go of your hesitation and hop on the bandwagon.

Image Credit: markus spiske; unsplash; thank you!

Scott T. Reese

Chief Technology Officer at Harbor Retail

Scott T. Reese is Chief Technology Officer at Harbor Retail, a design + build company where he helps bring Harmonic Retail live to life with intuitive Self-Healing Technology ™ and other future digital integrations.

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