How AI is Transforming Retail Business
Before the coronavirus hit, consumer expectations were already changing and creating challenges in the retail industry. And CIOs, who historically had little to do with developing new customer experiences, were increasingly being tasked with driving innovation. To deliver Amazon-like here-and-now products and services and build brand loyalty, they are turning to artificial intelligence (AI) to improve the shopping experience for consumers both in stores and online.
Of course, AI alone won’t transform retail but there are several key technologies that when married with AI can bring innovation to that industry. One is video analytics, which turns regular stores into intelligent stores that have visibility into consumer behavior for optimized merchandising. Retailers can leverage video for store analytics to enable things like heat maps that show where consumers are spending the most time in the store. That’s the kind of knowledge many retailers currently don’t have today.
Intelligent stores require an assortment of applications for various use cases. Using video analytic software, retailers can build a distributed infrastructure for deploying multiple apps on the same server at each store. Video analytics can also be deployed for asset protection at self-checkout kiosks and to monitor employee theft. For an average retailer, shrinkage, or the loss of inventory, accounts for approximately 1.5 to 2 percent of revenue — a cost that can be reduced and added back into the bottom line with the help of AI.
So, what does this look like in an actual store? Take a large retailer that has implemented an AI-powered asset protection solution at self-checkout kiosks, which can identify miss-scans and ticket switching. When someone tries to scan a bottle of wine with a bag of chips underneath, the app can recognize the product shape, lock the scanner, and notify store associates.