The power of artificial intelligence in the retail industry

The power of artificial intelligence in the retail industry
Microsoft’s Tracy Issel outlines how AI and mixed reality can help improve customer experiences

Rebecca Gibson |

This article first appeared in the Winter 2017 issue of The Record.

UK-based electronics retailer Dixons Carphone has deployed an artificial intelligence (AI) chatbot to help customers find products and enable its sales associates to check stock to better serve in-store shoppers. Similarly, US department store chain Macy’s has implemented an AI-driven virtual agent to quickly answer customer questions and optimise the shopping experience. Meanwhile, US home improvement retailer Lowe’s is using cognitive AI and Microsoft HoloLens so customers can plan kitchen renovations using mixed reality.

These are just three of the many retailers that are benefiting from AI, mixed reality and other digital technologies, according to Tracy Issel, Microsoft’s general manager of Worldwide Retail and Consumer Goods. “Advancements in the cloud, analytics and AI allow retailers to connect their solutions across their business, blending digital and physical environments to deliver consistent and personalised customer experiences across every channel,” she says.

Mixed reality, for example, can be used to bring images, product labels or shop windows to life, giving customers a new way to engage with brands and their products.

“Imagine if consumers could see, hear and feel the goods or the experiences retailers are selling, without leaving the comfort of their couch,” Issel explains. “Alternatively, shoppers in stores could go beyond the physical inventory to sample different product features from virtual catalogues. Planners and merchandisers can also use mixed reality to visualise designs and walk through floorplans before they finalise store layouts. Meanwhile, marketers can visualise data in 3D to help adjust promotions based on customer demand.” AI, advanced analytics and machine learning can unlock insights in retailers’ data so they can capitalise on new opportunities to boost revenue and customer engagement.

“These intelligent tools help retailers identify what products will sell best at a hyper-local level, predict optimum pricing, and then track demand and inventory in real-time so they can ensure the right products are available at the right time,” Issel comments. “Even a 5% reduction in stock outs can increase revenue by around US$20 million, so the benefits are huge. By combining insights about factors including purchase history, customer demographics and location, retailers can also tailor offers to individual customers, ensuring that their interactions are personalised and relevant. Creating a personalised and seamless customer experience across all channels tops every retailer’s wish list – and today’s technology innovations are making it possible.”

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