Retail Revolutionized: Three ways to profit from artificial intelligence
Whether we’re receiving coupons based on our spending, or product suggestions based on other people’s spending, artificial intelligence (AI) is transforming how consumers shop and experience brands. For retailers, meanwhile, AI could increase profits by almost 60%1. It could be a game-changer in this labor-intensive sector, augmenting the workforce and enabling employees to become more productive.
Some retailers already recognize ways for AI to complement their human workforce and boost profits. Stitch Fix is a clothing retailer that combines the expertise of fashion stylists with algorithms that analyze unstructured consumer data to deliver hand-picked items based on their preferences2. Another forward-thinking fashion company is Original Stitch, which deploys AI to analyze customers’ photographs of their favorite shirts before custom-tailoring and delivering a brand-new piece of clothing3.
Yet some retailers are hesitant about AI, and unsure how they can keep up to speed with the technology – let alone make the most of it. We have identified three ways for these retailers to revolutionize the retail experience using AI.
1. Understand the consumer
AI allows companies to find out more about how customers behave and what they want, giving them confidence that they are stocking the right products, targeting them at the right consumers, and building the right loyalty programs.
The data they gather from their Web and mobile channels already enables online retailers to develop more detailed and accurate customer profiles. But this sort of insight does not have to be exclusively Web-based: physical retailers could use AI technology to learn about customer activity as they walk around stores. Which displays do customers linger over? Which products do they take off the shelves but then decide not to buy? This sort of data will tell retailers when, where and how to nudge customers toward purchases, and give them the insights they need to improve the customer experience.
2. Guide them to what they want – and don’t know they want
Similarly, retailers can use AI to make it easier for customers to find what they are looking for – and, crucially, help them find things they don’t yet know they want.
This is especially valuable for the largest online brands, with their vast range of products. Consumers who feel overwhelmed by the sheer quantity of items will go elsewhere, so retailers that can guide customers in the right direction have a serious competitive advantage. And it is the online retailers that were first to recognize the value of nudging customers toward further purchases by using machine learning to anticipate their needs.
Used sensitively, AI makes customers feel that retailers understand what they want. Progressive retailers are already using AI to provide more sophisticated online recommendations, but they are also looking into tailoring the homepage to each user so they are presented with the items they desire most.
Consumers already know that the adverts they see online are personalized to them; Google uses AI to tailor its search results for individual users; and some online retailers use structured data to adapt what they show customers according to what they have searched for in the past. What is stopping retailers from customizing each person’s experience of the entire site?
3. Knock their socks off
Online shopping impresses customers with its ease and efficiency. As AI makes online shopping easier, customers are less likely to go to stores for commodity products such as laundry detergent. But as far as providing memorable experiences goes, physical stores have the upper hand. So, this is the time to start exploring how to use AI to dazzle customers.
Grocery retailer Coop Italia is a great example. Customers can simply wave a hand over a box of grapes to see nutritional and provenance information on a raised monitor. It also uses “vertical shelving”: touch applications that enable customers to search for other products and find out about related products, promotions, and even waste-disposal4. At some Neiman Marcus department stores, meanwhile, customers can try out a “memory mirror” – a virtual dressing room to compare outfits, see them from 360 degrees and share video clips with friends5.
With so many of us consulting our phones while we shop – to read reviews and research product information – it is only a matter of time before retailers answer these queries on the shop floor, using bots. AI lets them carry out multidimensional conversations with customers through text-based chats, spoken conversations, gestures and even virtual reality.
This is not hype. AI advances have already given some retailers increased customer loyalty and higher profits. Now retailers have the opportunity to boost their profits further by using AI alongside the human workforce – producing even greater efficiencies, and truly revolutionizing the in-store experience.
Jill Standish is senior managing director of retail at Accenture.
Westfield in partnership with Uber
Westfield’s billion-dollar renovation of its Century City Mall in Los Angeles will include a swanky Uber Lounge where customers can wait in style for their rides.
The shopping center owner has formed a partnership with Uber to facilitate use of shared rides at its centers nationwide. The mall owner will create drop-off and pick-up stations at every one of its U.S. properties, whose locations will be digitally mapped into the Uber app. The idea: make pick-ups and drop-offs easier and build mall traffic.
The deal includes the introduction of Westfield's first permanent Uber Lounge, which will be located at Westfield Century City in Los Angeles. The center is undergoing a $1 billion renovation to debut this fall. Westfield Century City's Uber Lounge will feature ultra-modern design, sleek seating, and customer amenities to let customers “wait for their Uber in style,” according to a company press release.
Moving forward, Westfield centers will host between one and ten Uber stations – each with prominent visibility, accessibility, and signage – similar to dedicated taxi stands or ridesharing pick-up points at entertainment and transportation venues. At some of the Westfield destinations, the Uber stations will also include kiosks with customer service representatives and "brand ambassadors trained to engage with customers and facilitate their Uber experience," the company said.
“Westfield’s shopping centers already have…digital enhancements such as product search, directional, and frictionless parking,” said Westfield COO William Hecht. The Uber deal, he added, “makes it more convenient than ever to travel to and from any Westfield destination.”
The service is not new to L.A. Caruso has for some time had a permanent Uber pick-up/drop-off location at The Grove. Last year it was the Uber’s busiest spot in the city with more than 2,000 drop-offs daily.
Walmart pledges up to $20 million in hurricane relief
Walmart is significantly expanding its Hurricane Harvey relief efforts.
Walmart and the Walmart Foundation announced they have committed up to $20 million in support of relief efforts in response to the severe weather impacting the Gulf region. This is an increase from the retailer's previously announced $1 million of in-kind donations for immediate relief.
Walmart operates nearly 600 namesake and Sam's Clubs stores in Texas. The chain's new commitment includes $10 million to help support of American Red Cross shelters and $2 million in support of the Hurricane Harvey Relief Fund at the Greater Houston Community Foundation.
In addition, Walmart said it would match customer donations two to one with cash and product donations of up to $10 million to assist the Red Cross with Hurricane Harvey relief. Walmart’s initial focus will be on mega-shelters, providing items to meet basic needs, such as water, infant formula, diapers, underwear and personal hygiene products. It also hopes to increase comfort in the shelters by providing items such as TVs, DVDs, games and stuffed animals for children and healthy snacks.
Walmart and the Walmart Foundation will also give additional cash and product donations totaling $10 million to support the Salvation Army, Feeding America, Convoy of Hope, Team Rubicon and the Hurricane Harvey Relief Fund at the Greater Houston Community Foundation, as well as other organizations assisting food distribution, sheltering and cleanup efforts.
Walmart has been heavily involved in Hurricane Harvey relief efforts to date. It has shipped more than 1,060 truckloads to the impacted areas, including over 930 truckloads of water; opened a mobile pharmacy in the Kay Bailey Hutchison Convention Center in Dallas, with another pharmacy being sent to Houston to provide prescription-related counseling at no cost to evacuees; and provided matter experts in logistics and emergency management to assist local emergency operations centers and with establishing local shelters.
In addition, local Walmart stores in the Gulf region have provided food, merchandise and other supplies, such as baby formula, batteries and kayaks to first responders, the National Guard, police and fire departments, churches and shelter organizations.
“Our Texas family of customers and associates are experiencing devastating impact from this storm,” said Doug McMillon, President and CEO of Walmart. “We are on the ground to help our friends and neighbors in the Gulf region, and we’ll continue to be in the tough days, weeks, and months ahead.”