Imagine the retail of the future. “Smart” cameras and robots make sure that the store shelves are regularly replenished with goods, control deliveries, analyze which product is most popular with customers and at what time. They use Artificial Intelligence. This is a technique already used in various companies. Casinos are among them. Get your Bizzo Casino login to see the amazing games that the online casino has to offer.
No loss in sales, no more situations when the product is in the warehouse of the store. But it is not on the shelf and no one knows about it, the last mile problem is solved.
This is not a utopia. But the competent use of artificial intelligence (AI) in retail, opportunities that are available to businesses right now. For example, in 2017, the American company Walmart announced that it would use special robots to scan shelves in 500 stores across the states. The introduction of robots does not lead to job losses. IT saves employees from performing repetitive and boring tasks, such as inventory, price checking, and the presence of unknown items.
Fortunately, AI-based solutions are appearing more and more on the IT market. They can prevent these problems and help reduce losses.
AI Insights for Retail
Artificial intelligence, machine learning, Big Data, video analytics and digitalization give retail insights. They help businesses create more accurate forecasts and improve services.
Computer Vision
Computer vision is more than just a mobile app or a ceiling-mounted camera that monitors store shelves. Modern cameras attached to a shelf opposite can monitor everything in front of them. While robots drive around stores, monitor shelves and take pictures with a 360-degree camera. Regardless of how it is implemented, the function of computer vision is to take pictures of the shelves and their contents. To check whether the goods are in place and whether they correspond to the retailer’s planogram.
In addition, the functionality of computer vision provides for the possibility of monitoring price tags in the store. For example, you can track whether the value indicated on the price tag corresponds to the promotional one.
Besides advantages, the computer vision system has disadvantages.
The need to purchase a system and a large number of cameras. For example, purchasing video recording services for a large chain of stores can be expensive.
Recognition of each photo. This process requires a significant amount of computing power and remains a significant part of the costs.
The view of the cameras depends on the location. For example, cameras located on the opposite shelf demonstrate a fairly good result. But devices mounted on the ceiling have a limited viewing angle and cannot fully fix the lower shelves.
The chambers do not take into account the depth of the shelves. For example, the first three boxes of juice were taken from the shelf. Ten more boxes remained in a row, but the location of the camera does not allow it to fix the goods deep in the shelf.
The equipment requires regular maintenance and repair.
If all these points are taken into account, then disadvantages can be turned into advantages. And used proactively. For example, to increase the amount of computing power, it is better to use hybrid clouds. This is the best option for scaling infrastructure in the future and performing analysis and calculations in the present.
Analytical Solutions and the Formation of Clear Tasks
The analytics solution is a service that receives information from the retailer and analyzes data about such parameters. From price, sales, stock, promotions and product list. During the analysis, the system detects anomalies.
For example, if during the analysis of checks and the balance of goods in the warehouse, the service revealed a discrepancy between the sales plan and the fact. Then, the analytical solution initiates verification of the information.
Such tasks are generated automatically. Store managers do not need to spend employee resources on photographing and analyzing shelves and racks. Store personnel are connected only after the inspection has been initiated. Automation of part of the processes in retail has a number of advantages. Saving staff time, saving money, no need to pay extra for the work of employees, elimination of errors due to the human factor, control of the actions of the “field” employees of the store.
In addition, analytical services provide the ability to track lost sales. Receipt monitoring gives an idea of the purchases that could be made. Based on this information, the service builds a sales plan, and by monitoring the activities of employees, it determines when sales resume. Thanks to this service, you can evaluate the impact of its work on reducing lost sales.
Machine Learning in Retail
This is a method of quickly marking and analyzing large amounts of information that is beyond the power of a person. Large retailers are already using artificial intelligence and machine learning technologies to increase sales. For example, to create personalized product recommendations in mailing lists. Or to analyze customer data: purchase frequency and amount, lifestyle, preferred price level and favorite product categories.
The algorithms learn from historical data such as transactions, customer interaction history, information from online sources, revenue data, etc. The quality and volume of data, as well as the length of the period over which they are collected, determine the accuracy of the model, which will be obtained in the end.
Automation and Algorithms
Algorithms help to build a system of priority tasks for staff. This is a kind of accent that signals to employees that they need to pay attention to the problem.
For example, the task of promoting new products in retail is to ensure that a new product is brought to the store shelves and receives due attention from buyers. This can be hindered by two things.
First, the human factor. For example, retailers may forget to take out a product or not find a place for it on the shelf.
Second, the technical issues related to updating the store planogram and related processes.
Both problems can be overcome with the help of business algorithms and technical solutions.
Innovation plays an important role in business. To promote them, store employees need at least: not to forget them in the warehouse, take them to the trading floor, find a place on the shelf and put them up. If there is no shelf space, this is an additional trigger for the back office to check if the planogram is correct. with issues that are not major but still very important.
Big Data and Forecasts
Thanks to the development of a culture of collecting and storing information in retail, huge amounts of data are accumulating. They provide a huge number of opportunities for obtaining valuable insights. Some scenarios are already actively used in retail. For example, forecasting sales or the effectiveness of promotions. But only a small part of entrepreneurs knows how to work with this data.
Digitalization in retail is facilitated by four elements.
- The information about the equipment used.
- The installation of sensors to determine the location and condition of the goods at the stages of the supply chain.
- The complete product information.
- The information about cameras that are responsible for the security and recognition of buyers.
The process of full digitalization of retail is now under development and may take the next decade. This is a very simple logic: the more data each company digitizes, the more the total amount of useful information in retail increases.
AI solves Two Main Business Problems: Revenue Growth and Cost Reduction
In the future, the integration of AI solutions in retail not only eliminates human error, but is also cheaper. Equipment purchased once is more profitable than regular remuneration of additional employees, and artificial intelligence contributes to the generation of additional time, which in turn leads to “sales rescue” in retail.
Thus, artificial intelligence not only solves applied problems, but also solves two main business problems: revenue growth and cost reduction.