Written by The arrival of the internet followed by smart mobile phones has resulted in a dramatically changed landscape for the retail sector.
It seems that every day we hear a story about a bricks and mortar retailer having to shut down stores.
Digital retail users have become accustomed to a convenient and immediate search and discovery journey. They leave a trail of digital data that enables the digital retailer to target the user with relevant and ideally personalised product offering.
The bricks and mortar experience has to play catch up and not simply by using big data analytics to spam users with campaigns that are not relevant to them or simply replying on monitoring (some would say spying) on where customers roam the store.
Examples of how the subsets of AI technology, namely machine learning and deep learning can be deployed across the retail sector are as follows:
- Face recognition for payments (Amazon Go);
- Personalised recommendation algorithms;
- Stock inventory optimisation with demand prediction;
- Targeted marketing campaigns.
AmazonGo has demonstrated the usage of Deep Learning with Convolutional Neural Networks for object detection and facial recognition combined with sensors to show a real world implementation of advanced IoT capabilities. KFC Beijing is also reported to be using Deep Learning for face recognition to order food and for making payments. The advent of 5G networks will further enable the deployment of such technology around the world.
Bricks and mortar stores need to embrace the digital transformation path in order to reverse the decline trend of recent years. This will include adoption of AI technologies to enhance the customer experience.
Statistics show that the majority of searches in the UK for apparel items occur via mobile. Over half of traffic to retail websites is now coming via smartphones and tablets and mobile commerce now accounts for 36% of UK e-retail sales, rising to 40% for clothing and apparel websites.
In the US the role of mobile and tablets are also growing with Techcrunch reporting that the 2017 holiday shopping season will hit a new milestone: for the first time ever, mobile visits to retailer’s websites are expected to surpass desktop visits during the months of November and December.
Mobile holiday visits in the US surpass desktop for the first time :
Retailers need to look at ways to connect mobile to in store and leverage AI technologies to personalise that experience for example letting the user know of items that maybe interested in or promotional offers on items that are actually relevant to the user.
A continued delay to embrace the technological shift that is occurring would leave bricks and mortar stores at risk of following the CD and record stores disappearing act.