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Personal, unmanned and streamlined: how intelligent automation is transforming the retail industry

by Sergei Kiyzan

Business environments are highly competitive and fast-paced, and retailers go the extra mile to stand out and build loyalty. As frictionless customer experience, high product quality and streamlined processes are the key to success, companies incessantly seek ways to obtain them. Here, intelligent automation (IA) comes to the fore.

At the heart of IA, there’s a seamless combination of artificial intelligence (AI) and robotic process automation (RPA). AI is responsible for actionable insight-driven analytics, smart decision-making and intelligent coordination of employees, systems and robots. RPA, in turn, automates processes and minimizes human participation in repetitive tasks, which improves the speed and efficiency of their execution.

As a result, companies increase customer engagement, boost sales, reduce costs and streamline a considerable part of their repetitive tasks — those that relate to HR, planning, accounting and other areas. Because of these positive outcomes, retailers heavily invest in smart automation — for example, industry experts predict annual expenses for AI to reach $7.3 billion by 2022.

Is intelligent automation worth it? Definitely! Let’s check out the most prominent examples that illustrate how IA benefits every stage of value delivery in retail.

Individually tailored recommendations

An increasing number of customers place a very high value on personalized brand experience — 48% of them abandon a brand if it fails to deliver in that respect. How can businesses improve their chances of retaining customers and create experiences that fit individual requirements and expectations?

Businesses rely on AI’s capability to digest big data derived from millions of customer journeys by using chatbots and recommendation engines.

US retailer launched its online concierge Gifts When You Need to help customers choose the right product. Through a personal conversation, the chatbot gets information about the recipient, checks the database for similar clients, and provides recommendations that perfectly match.

According to the retailer, the personalized recommendations helped the company increase its clientele by 70% in just two months.

Expertly guided online purchase process

To convert as many leads into buyers as possible, retail companies make the most out of intelligent automation to make the sales process easy and enjoyable. How do they do it?

Retailers personalize customers’ shopping experience with virtual sales assistants.

Epson America, whose major business is the sale of commercial products, found it had insufficient lead processing. To ensure the maximum engagement for all leads regardless of their quality and specifics, the company introduced an AI-powered sales assistant.

It had personal, human-like conversations with potential customers to provide the exact information they needed and raise their interest. This invisible team member that sounded exactly like a human improved prospects’ response rate by 240% and increased the revenue by more than $2 million.

Streamlined in-store shopping

The positive shopping experience is the reason why companies strive to provide useful information at all stages of the customer journey. While online shops offer a variety of opportunities, the real-world environment is not so flexible.

Retailers equip their physical facilities with self-service terminals, scanners for shelf scanning or digital shelves to optimize the offline shopping process.

The Kroger Company, in collaboration with Microsoft Corporation, implemented the digital shelf technology at a supermarket chain to reduce the time that buyers spend at stores. Image recognition cameras scan digital shelf labels that display product information and advertisements, helping customers make quick decisions and navigate across stores more easily.

Watch the video below to get an idea of how the solution works:

With this breakthrough, these two companies expect to redefine grocery retail. Going forward, they plan to connect the shelves with customers’ smartphones to provide an even more personal in-store shopping experience.

Quick and human-error-proof warehouse logistics

Traditionally using manual power for loading operations, warehouse logistics has significantly changed in recent years. These days, smart machines perform a much larger volume of work than humans can.

With robots replacing men, smart automation affects a variety of processes: stock replenishment, visual stock audit, assortment optimization and shrinkage monitoring.

Alibaba is probably one of the first retailers that comes to mind in connection with large warehouses. It is hard to imagine how the company would run its warehouses, with an area of almost one acre, without robots. These machines cruise about the warehouses and perform a great deal of heavy work, while humans are left to do some light operations.

According to Alibaba’s estimates, its robot workers are twice as efficient as humans.

Data-driven logistics and unmanned delivery

Smart technologies not only help carriers optimize routes and elude poor weather in order to stay on schedule, but AI-enabled drones eliminate the need for human participation in the delivery process altogether.

The best-known example of unmanned order delivery is probably Amazon’s Prime Air. As far back as 2016, the company planned to use drones to quickly ship small orders of up to 30 minutes’ flight by air.

The plan has not been brought to life yet, but one day, this delivery method is expected to make other retailers’ “prime” programs a thing of the past.

Cashless and no-time in-store checkout

Nowadays, using contactless payment cards is an everyday practice. Companies lean toward more optimized and convenient payment methods, such as those that use mobile devices and their near-field communication capabilities.

However, Amazon Go demonstrates that there is still room for improvement: the retailer has created a concept of an outstanding AI-powered check out–free system that eliminates wait times, and called it Just Walk Out. How does it work?

Deep learning, computer vision and other AI algorithms connect users’ physical shopping carts with their accounts so that the check-out procedure is automatic. A detailed video of how Just Walk Out works is here:

Amazon has not launched the system yet due to technical issues, but this concept has paved the way for a brand-new in-store shopping experience.

Secure digital transactions

Given an increasing number of fraud transactions, retailers and payment system providers use intelligent automation to predict and prevent these cases.

PayPal uses smart algorithms for this purpose: the fraud detection system has learned to recognize malicious operations and pull the plug on them. As a result, PayPal’s fraud rate has significantly lowered, and it’s now four times less than the average industry rate — just 0.32% compared to the 1.32% in the industry.

Insight-driven supply chain planning

In its The coming AI revolution in retail and consumer products report, IBM expects supply chain planning to become the area with the most intensive use of smart technologies.

Indeed, AI’s ability to process and use big data to come up with actionable insights is incredible and far superior to humans’. That is why a growing number of retailers implement AI-driven algorithms to forecast demand and plan production and procurement accordingly.

Also, bots perform better than humans when it comes to repetitive tasks that are effort- and time-consuming but don’t require much thinking, such as documentation handling, extensive calculations, and others.

AI in retail: the trigger for the revolution

It’s clear that many processes in retail can be intelligently automated now, while greater changes are yet to come. AI has completely changed the retail industry in just a few years, which has resulted in measurable benefits to both companies and their customers.

Retailers make the most of smart and streamlined processes that add value to their businesses, and their clients enjoy personalized customer journeys.

So, it’s not a question of whether retail companies should intelligently automate their processes or not — they should, as they cannot afford to miss this opportunity. The real question is how to do it within the shortest possible time

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