How can retailers unleash the power of artificial intelligence
Artificial intelligence has been a buzzword in the retail industry for some time now. But rather than just talk about it, retailers are now at a stage where they are putting words into action and starting on their first AI projects.
Over the last year, an increasing number of retailers have started to adopt the technology. Uniqlo, for instance, uses machine learning to power a digital assistant on its app, which is able to give highly personalised recommendations. In Hong Kong, convenience-store operator Circle K unveiled an AI-driven checkout solution last year that uses image-recognition technology in the self-checkout process.
While there are clear benefits to implementing artificial intelligence – improving operational efficiencies and gaining a better understanding of the customer are just two – it can also be a daunting task to embark on. Here we identify three key considerations for retailers that are looking to unleash the power of AI:
Quality of data
Through machine learning, retailers are able to take data from multiple channels and turn that into actionable predictions and recommendations. But the biggest success factor is not the algorithm behind these insights, but rather the quality of the data that feeds into it. Retailers that do not have their data estates in order risk having underwhelming outcomes from their AI investment. This is something that must be considered beforehand.
Choosing which areas to focus on
There is a multitude of areas in which artificial intelligence can be deployed in a retail setting. Aside from the different applications of AI technology – for instance, machine learning, natural language processing and robotics – there is also a choice to be made in terms of the operational area, be that the customer-facing side of the business or processes that run behind the scenes.
AI initiatives that help to improve the customer experience can be an ideal starting point as this is an area that benefits from a wealth of data and can provide a quick win for a retailer.
Bringing in external expertise
Many retailers will lack the skills and expertise to confidently start leveraging AI technology. The solution is often a combination of recruiting talent to bridge the skills gap and working with credible technology partners. The advantage of both these approaches is that retailers can hit the ground running and be able to accelerate their first move. Speed is critical if a retailer wants to be a disruptor rather than disrupted.
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As Head of Research at Tofugear, Philip provides insight on how retailers are adapting their digital strategies to target the connected consumer. Prior to relocating to Hong Kong, he led Retail Week’s research team in London, researching the tech and ecommerce strategies of the UK’s leading retailers.