Artificial Intelligence, retail is at a turning point

IA e innovazione retail
01 Oct 2019

What’s the point of artificial intelligence? It’s better to make it clear, to the superficial bards of “disruption”, that the important question is another one, which was formulated seventy years ago.

Can machines think? The starting phrase of an article by Alan Turing (Computing machinery and intelligence), written in 1950, which would mark science until today.

At least seventy years of history in which artificial intelligence played a key role in the development. As the World Economic Forum stated, the evolution of artificial intelligence could even be considered as the fourth industrial revolution, that breaks the boundaries between physical, digital and biological world.

According to Gartner, AI global industry will worth 2.900 billion dollars within 2021. It’s better to be clear, though. We are not talking about a possible future, we are talking about a structural and competitive element, that is already decisive in most of the international distribution.

(IBM 2019)

In retail

AI applications cover a very wide space. From strategic planning to operativity, from supply chain to every possible aspect of client relation, in-store and online.

From 2019 to 2024 is expected to grow to a CAGR of over 35%. According to IBM estimations, in 2022 the global expenditure in the AI technologies sector will worth 7,3 billion dollars, overall, compared to 2 billion dollars in 2018.

Even more interesting, maybe, the short-term forecasts. Within next year, 50% of customer assistance services will use AI for conversational systems. Also, 40% of retailers will use that technology for the management of prices and promotions.

More data state that, without mistaking possibilities, consumers’ disposition based on the newly acquired awareness. 77% of customers are encouraging greater customization of the relationship with the bigger online retailers. And, above all, within 2022 the 41% of them would like to have, at the entrance of the store, its global consumer profile to be known by the reseller.

How

Artificial Intelligence, with the radical improvement of big data analysis, has given to the sector far more efficient prevision and decision support instruments.

AI determines an important improvement in supply chain processes, supporting data sets integration, until now separately managed in the different areas. It unifies the managing of orders, inventory, and transports, and, as a consequence, the resulting predictive analysis will enable the development of better and better selling and service models.

Machine learning and deep learning technologies should have, in short/medium-term, the greater market share. Automatic learning technologies, by fact, create the premises for more and more advanced customer experience. Zalando, for example, uses a dedicated scientist structure, which purpose is the creation of a customized boutique, different for every customer.

In the shop, different usage of roboticsalready defines the new store arrangements.

 

Walmart Levittown

Walmart store in Levittown, 4.500 square meters and 100 employees, is like a manifesto of Artificial Intelligence possible advantages. Named “Intelligent Retail Lab”, is equipped with sensors, footage instruments and interactive displays controlled by an AI system.

The application logic, however, should not be confused with Amazon Go “cashless” stores. Walmart is indeed keeping traditional check-out systems, using technology to make employees prepared for the direct interaction with customers.

In Levittown, the installed devices acquire 1,6 TB of data every second. The fact, indicative of the importance assigned to the project, is that this huge volume of information is elaborated in a domestic data center.

The amount and types of purchased products are detected constantly, to assess their availability in relation to the forecasted demand and prepare the mark-up. Particular attention is obviously paid on “fresh food” and frozen food, of which the system detects the expiry date and manages the pick-ups.

The logistics

In the implementation of AI, it is crucial the identification of critical points and the definition of usage cases. This does not regard the retail core business only, but also complementary activities.

The Californian ClearMetalhandle the transport technology, the logistic and the supply chain. It has designed a predictive-reactive intelligence platform relative to shipping events, time and requirements, based on carriers’ data. It also acquires real-time weather conditions and currency fluctuations. This technology will drastically change the management of deliveries.

According to ClearMetal statements on themselves clarify the strategic importance of Artificial Intelligence in the sector: “We have both logistics and machine learning in our DNA”.

The perspectives

While writing, the agencies are typing about the latest acquisition made by Facebook. It is Ctrl-Labs, a startup active in the study of communication methods, through brain signals, with computers. A billion dollars, according to CNBC, for the exploration of brain-computing. At this rate, no more shopping list, at the supermarket will be enough to look at the shelf that, moreover, will remind me with disregard: “milk, every time you forget the milk”.