In an ever-competitive retail market, how are forward-thinking retailers getting an edge over their competitors? Artificial intelligence (AI).  AI is no longer the domain of the likes of Google, Facebook and Amazon, who are making big bets on this technology. In December, I tested whether AI could help me with my Christmas shopping, and found some interesting examples. But beyond search and selection, retailers are experimenting with other applications for AI – and some are pulling far ahead of the pack.

Are you applying AI inside your business? Is it the latest technology fad or a real game-changer? Will you wait and see how things play out, or will you start experimenting now? How are retailers using AI to deliver tangible benefits – i.e. gaining efficiencies, improving customer experience, and increasing security?  Let’s take a closer look…

Customer sentiment analysis

AI, machine learning and natural language processing (NLP) can be used to measure customer opinion and communication by analysing customer emails, chats and even phone calls. This data is analysed and targeted customer service approaches are recommended, based on the rules the software has learned and been taught.

Ocado have developed AI-enhanced processes in-house to do just this. Instead of staff wading through hundreds of customer service emails daily and manually prioritising them based on importance, employees can focus on responding to urgent queries. This results in greater response times to important queries and less time spent filing incoming emails for manual evaluation. A real win!

Meet Re-infer, a startup that uses deep learning to make communications data understood and actionable. Luxury fashion marketplace Farfetch are working with Re-infer to make better product decisions by enabling them to analyse vast amounts of customer feedback.

“In less than 5 years from now facial recognition will likely be one of the main forms of authentication.”

Automatic stock replenishment

AI and machine learning can be a powerful tool to automate stock replenishment. By using multiple variables including weather, promotions, holidays and special events to make probabilistic forecasts, the technology predicts what a store requires and automatically orders the stock in. It constantly learns and collects data on on-going store purchases, trends and stock flows, so it can adjust its behaviour continuously.

Morrisons are working with Blue Yonder, and have implemented the technology in all their 491 stores, automating over 13 million ordering decisions a day, and reducing out of stocks by 30%. Automation also reduces cost to serve, freeing up more time for employees to help customers on the shop floor, improving service.

Smart packaging

Smart packaging provides supply chain transparency from farm to fork. It uses AI to give consumers details about the food’s origins, quality certificates, location details and the like, all just by using your smartphone to point and click.

Carrefour has trialled smart packaging in their stores in China to help give customers access to a vast array of information on products with a tap of their smartphone. They have partnered with The Visual Trust Initiative, which is a partnership between SGS, a global expert in food certification, Transparency-One, a supply chain transparency tool, and Blippar, a technology that uses advanced image recognition, computer vision and augmented reality.

Facial recognition authentication

Biometric authentication using fingerprint log-in is becoming mainstream in banking and payment apps. The next stage? Facial and behavioural recognition, much like what is used by the iPhone X.

A Chinese unicorn, Megvii Face++ uses facial recognition, which tracks 83 different points on the face. Alibaba is using the technology for authentication in its payments business, Alipay, and as a form of employee ID to enter buildings on its campus in Shenzen. Alibaba is also testing ‘Smile to Pay’, a payment method via selfie, in the KFC in Hangzhou.

Let’s face it, 10 years ago we would have thought facial recognition was a bit sci-fi. But with the amount of funding facial recognition startups are receiving today, in less than 5 years from now it will likely be one of the main forms of authentication.

Retailers who are ahead of the curve when it comes to the applications of AI will have learned more from their early experiments and will reap the benefits. Those playing catch up may find themselves continuing to be just that, followers.

Experimenting is essential, and so is discovering the art of the possible. As disruption is the new constant, companies really cannot afford to stay still. So retailers will need to be front-footed on developing their capabilities in this amazing technology, among others, to stay in the game.