Future of AI-driven Brick-and-Mortar Begins with Responsive Retail

We don’t live in a static world. When I “look” toward the future, I see sensing, machine learning and deep learning leading us toward a time when artificial intelligence (AI) could enable more secure and actionable retail insights with tremendous results. I envision stores using technology that always knows if shelves are stocked or not, with merchandise arranged so that retailers can gain deeper insights into inventory delivery, immediate availability, and to stay ahead of the fashion trends that drive a near constant change in stock. I imagine a store where shuffled merchandise doesn’t mean lost merchandise but instead uses technology to know where items are located and uses pattern matching via machine learning and artificial intelligence to really understand the retail environment.

Connected retail technology could also enable retail staff to say, “Hey, there’s a $5 item covering a $100 item that was really supposed to be on display; l need to fix that so that I can have can have the insight into the ROI of this endcap.” It could enable them to know that a store is merchandized properly. That people interact with endcaps and individual items.

We at Intel, along with our partners, understand that retailers are looking for answers for real-time inventory management – from ordering and delivery tracking to delivering great customer experience through merchandising insights and optimizing a workforce for maximum results – a 360-degree view. I’m encouraged to see retailers moving down this path. Unfortunately, many times the quick pace of digital disruption has resulted in islands of technology that have been cobbled together, making it difficult for retailers to glean that full 360-degree view of the store that leads to actionable insights. As technology leaders, we can help enable technology solutions that seamlessly support retailers.

A woman shops for shoes.


Localizing Inventory Management Solutions

From my perspective, improving inventory management can solve several retail issues at once. It’s a quick, cost effective entry point for most retailers. Why? First, it’s not just a missed sale if the inventory is not in its place, but it affects the customer experience. Whether a retailer offers an inviting and easy-to-understand sales process is completely irrelevant if the product isn’t on the shelf. So, for me, that’s where it starts. Inventory visibility allows for immediate localization because they’re seeing the real-time demand. Imagine a sales associate wondering, for weeks, if Christmas sweaters have arrived into a Phoenix, Ariz., store only to find out they are not due to arrive until May? It makes absolutely no sense yet hiccups in the supply chain like this occur every year. If a near real-time inventory management solutions was in place, then the retailer would have direct insights into the supply chain and could make merchandise adjustments, and understand the buying habits of not just customers, but individual stores and whole communities. The retailer could then instantly replenish inventory, or not, based on real-time demand.

One solution along these lines that I’m particularly excited about is the JDA Store Optimizer, supported by the Intel Responsive Retail Sensor. Built on Intel technology, it offers retailers an intelligent technology solution to help manage and overcome retailer’s business challenges. It tracks inventory accurately, so you always know where items are located and how many are in stock while also automatically updating store associates’ tasks. Having near real-time inventory data makes it easy to run lean, save time and money and replenish products as needed with little risk of shortages, overstocking, or preventable returns. The JDA Store Optimizer then uses this precise inventory data to automatically identify, prioritize and assign tasks that sales associates need to carry out to optimize operational efficiency, while freeing the store manager to spend more time making decisions that will improve store performance and increase revenues.

A hand touches a kiosk screen.


Enhancing Data Security and Privacy

Along with inventory insight, data security and privacy are also hot topics with retailers. When retailers deal with privacy, they approach it from an opt-in, as an enabled right into the platform. From a purely application perspective, the core platform is built from the ground up with security in mind. It’s also important to make sure that data can be isolated per application, so that if a retailer has a specific set of data they’re bringing that it’s only for them and they know they can trust that verified data. This kind of store-to-cloud security is built in from the ground up. Then there’s end-to-end data encryption, which helps strengthen data security and privacy.

From my perspective, privacy is personal. Some people are completely okay with giving away their details; other people are very guarded about it. Only 43 percent of shoppers say they are comfortable giving up personal data to a retailer—even if it is to improve their shopping experience. This is a relevant and prescient issue to retailers today. Our approach is that there needs to be a way to opt-in, a loyalty program is a great way to do that. If you paired that with opt-in facial recognition through smart video systems in stores, then the solution could also tap into more anonymized demographics to inform store layouts and endcap optimization. Do families with children tend to spend time in certain areas of the store? What about groups of female or male shoppers? That kind of anonymized demographic information could provide valuable insights.

As we approach close to 50 percent of shoppers opting-in to share their data, it’s clear that a growing number of consumers see the value in a more personalized experience. I really think it’s about what level shoppers want to opt-in and loyalty programs are probably the best approach. Moral of the story is we’re not creating the big brother state of retail. People are asking for more personalized experiences and technology can help enable that for them.

A shopper is pleased that her local store uses the Intel Retail Sensor Platform for inventory tracking. As a result, she just scored the best bag ever.


Enabling Tremendous Insights

Consumers also say that they want associates who are more knowledgeable and they want to get the right information from the right person. They want

associates who are knowledgeable about products and can recommend products which would be of best value to them and of highest quality. A recent study shows that 2 in 3 shoppers who tried to find information within a store say they did not find all the information they needed; when they were unable to find the complete information, 43 percent of customers left the store frustrated; 22 percent said they were less likely to buy from that retailer, and 41 percent more likely to shop elsewhere. It is so important to have engaged, knowledgeable, and able sales associates and the JDA Store Optimizer enables sales associates to get back to the business of being available to customers rather than just running around the store in search of inventory.

I think we can learn even more over time to make store truly responsive. In a way, the store itself is learning. The platform helps the store learn and as the store learns, it keeps up in near real-time with the changes that are happening in consumer behavior, and the retail environment. Moreover, there’s no lag time. You’re not being caught unaware.

As we’ve seen, successful retailing comes down to one thing: getting the right product into shoppers’ hands. That may sound simple, but success requires inventory accuracy, efficient sales associates, and the flexibility to quickly adapt to shoppers’ needs in near real-time. Thanks to today’s emerging retail technology solutions I’m convinced that the retail industry’s future has never looked brighter!

Visit intel.com/retail to learn more about how Intel technology is shaping the future of responsive retail. To stay informed about Intel IoT developments, subscribe to our RSS feed for email notifications of blog updates, or visit intel.com/IoTLinkedInFacebook and Twitter.

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