More AI in retail stores means more personalization

Cheaper and more easily accessible AI developer tools are part of the reason why traditional retailers are better at marketing personalized experiences to customers.

It's 2019, and you can buy just about anything online. Furniture? Yup. Fresh food? Sure. Clothing, electronics, software, gift cards, digital games and multimedia products? Of course.

For buyers, shopping online is convenient and easy, not to mention highly personalized -- advances in analytics and AI have seen to that. Companies like Amazon that also offer free or low-cost digital storage and software have been able to grow rapidly in this ease-of-use, tech-driven age.

Numerous brick-and-mortar retail stores, on the other hand, have faced financial hardships over the last few years adapting to greater customer expectations and new technologies.

That doesn't mean they haven't innovated. Large retail chains have worked steadily to meet the new demands, using analytics and AI in retail stores and with their online outlets to deliver innovative apps and more personalized marketing to customers.

Along with those adaptations has come a cultural shift.

Putting the AI in retail

I don't believe there exists a retail company anymore … They are all tech companies.
Vilas VeeraraghavanWalmart Labs

"I don't believe there exists a retail company anymore," Vilas Veeraraghavan, director of engineering at Walmart Labs, said in a panel talk at the annual Global Artificial Intelligence Conference in Santa Clara, Calif., last month.

The panel included Veeraraghavan; Ravi Kumar Buragapu, director of engineering, digital platform and data science engineering at Kohl's; Anjan Goswami, director of data science and engineering at Salesforce; and Pavan Arora, chief AI officer at Aramark.

"For that matter, there doesn't exist a finance company anymore either," Veeraraghavan continued. "They are all tech companies."

Major retailers, like Walmart, have tended to be slow in adopting and developing state-of-the-art software and customer experiences.

Retail AI panel Global AI Conference
A panel of data scientists in the retail sector spoke at the Global AI Conference on Jan. 24.

While online retailer Amazon has for years been offering its customers cloud storage, movie and music streaming applications, and a mega-popular AI assistant -- Alexa -- most of the other leading on-the-ground retailers haven't provided many out-of-store digital products, nor have they been able to fully keep up with the hyper-personalized marketing strategies of strictly online retailers, like Amazon.

Those technological changes, as well as economic and cultural shifts, have helped deliver crippling blows to retail chains, such as Toys R Us and Sears -- chains that were once practically part of the American vernacular.

Yet, despite what might be seen as a slow start for brick-and-mortar retail chains, over the past few years, major retailers have worked to incorporate advanced analytics and AI in retail stores and on websites, focusing on providing a quicker, more efficient and more personalized experience for customers.

Compared to five years ago, when a customer goes onto a retailer site now, "your experience on the site is highly personalized to you," Buragapu said.

"Every act you do on the site, every behavioral pattern you exhibit on the site is being mined with several tools and technologies underneath," he said.

Retailers mine and analyze actions outside of the web as well, Buragapu continued, encouraging customers to download mobile applications and use them in stores for discounts or to check out.

Mining and using data

The collected omnichannel experience, the high level of personalization -- "this is the biggest change in the landscape of the retailer, every retailer," Buragapu said.

A reason for this, Goswami explained, is the large number of affordable, relatively easy-to-use AI development tools available, including those offered from big tech vendors, such as Google, Microsoft and Amazon.

"Building an AI system, a machine learning system, has never been easier than it is today," Goswami said.

Major retail chains have access to massive amounts of data as well, which has helped fuel their recent forays into analytics and AI, even as much of that data is unstructured and sitting in data lakes.

A look ahead

In an interview separate from the panel event, Pedro Alves Nogueira, head of the AI and data science specializations and director of engineering at talent network Toptal, said he expects "retail companies would be trying to leverage their data" right now in the hopes of further pushing their AI technologies.

He said, for the near future, at least, he doesn't "really see many things happening that will be new" with AI in the retail space.

But, Nogueira added, it's likely major retail chains will continue using AI and analytics to personalize their marketing, as well as "more accurately try to predict what their customer would want to buy."

Customer analytics has been around for years, of course, but modern retailers, with the help of augmented analytics tools and AI, will likely to continue to focus on attempting to "try to create demand based on what customers will be interested in buying in the future," he said.

Nogueira noted that AI in the supply chain -- specifically, in logistics -- will likely also see a boon in the coming months and years, as retailers use predictive analytics more effectively to plot out shorter shipping routes and routes that are more likely to avoid being affected by inclement weather.

The conference was held Jan. 23 to 25 at the Santa Clara Convention Center.

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