Retail

AI Solutions for Retail Industry

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Artificial intelligence (AI) over years of being considered just a buzzword is now having a real impact on the retail industry, in many cases deciding about “be or not to be” of companies.

No wonder, today’s merchants collect massive amounts of data on transactions, interactions, and customers’ behaviors, that can be used in decision process improvements and keeping up with ever-changing consumers’ needs. With the old-fashioned, manual way of dealing with it, their efforts are, however, doomed to fail; yet AI occurred to be a “silver bullet” solution.

Artificial Intelligence (AI) is going hand in hand with Data Engineering (DE) that reshapes retail from the inside out, affecting almost every part of customer experiences both in brick and mortar and online stores.

Below, you can discover top AI solutions for retail industry.

Demand forecasting

Demand forecasting in retail includes analyzing numerous internal and external variables that impact demand -from seasonality to promotions and inventory levels to market trends. With it, retailers can more effectively improve stock management, reduce storage costs and prevent stock-outs.

Shelf and signing analysis with computer vision

Computer vision solutions are to detect natural objects placed on store shelves and classify them based on category, brand, and item, streamlining manual, time-consuming, and error-prone store audits.

Inventory & pricing optimization

By analyzing vast amounts of data, behavioral customer data, and seasonal trends included, AI models can take into account multiple different scenarios, suggest the most relevant price, and evaluate the impact of sales promotions on given product categories.

Business benefits

How AI supports retail industry

Optimized operations

AI-powered systems can automate repetitive tasks, optimize inventory management, and streamline supply chain operations, leading to increased efficiency and cost savings.

Enhanced customer experience

AI-powered chatbots, personalized product recommendations, and predictive analytics can deliver a personalized and seamless shopping experience, helping to increase customer satisfaction and loyalty.

Driving sales and boosting revenue

Drive Sales and Revenue Growth: AI can analyze customer behavior, identify trends, and enable targeted marketing campaigns, ultimately leading to increased sales, higher average order values, and greater profitability.

Improve decision-making

AI can provide retailers with real-time insights and predictive capabilities, empowering them to make more informed, data-driven decisions that align with evolving market conditions and customer preferences.

AI in retail: Implementation challenges

Data quality and management

Integration with existing systems

Rapidly evolving technology

Security and ethical concerns

Challenge: Poor, insufficient, or siloed data

Solution: Establish a data governance framework that includes quality standards, cleansing processes, and regular audits. Implement unified data platforms to integrate information from various sources, creating a comprehensive dataset for AI applications.

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Challenge: Complex integration with legacy systems

Solution: Adopt a phased implementation approach, starting with pilot projects for gradual testing and adjustments. Utilize API-driven architectures to facilitate seamless communication between new AI tools and existing systems, minimizing disruption.

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Challenge: Keeping up with fast-paced AI advancements

Solution: Foster a culture of continuous learning and adaptability within the organization. Form strategic partnerships with technology firms and AI specialists to gain insights and access to the latest advancements without the need for in-house expertise.

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Challenge: Security risks and ethical dilemmas

Solution: Implement robust cybersecurity measures, including encryption, access controls, and regular security audits. Develop and adhere to ethical guidelines for AI usage, ensuring responsible and transparent data collection and use.

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AI solutions in retail

Chatbots and virtual assistants

Visual search

In-store monitoring

Sentiment analysis

Supply chain optimization

AI-driven chatbots enhance customer service by providing 24/7 support, answering queries, and assisting in product searches. Sephora’s chatbot exemplifies this application by offering personalized beauty advice.

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Visual search technology enables customers to find products by uploading images instead of using text-based queries. The system analyzes the uploaded photo and matches it with similar items in the retailer’s database, providing relevant search results.
This approach enhances the shopping experience by allowing users to discover products intuitively, especially when they struggle to describe what they want.

By leveraging visual content, retailers can improve customer satisfaction and increase the likelihood of product discovery and sales.

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AI systems equipped with computer vision can monitor customer movements and behaviors in stores, providing insights into shopping patterns and enhancing the in-store experience.

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These applications illustrate how AI is transforming the retail landscape, enabling businesses to better meet customer needs and streamline operations. As the technology continues to advance, its integration into retail practices is expected to grow, further enhancing the shopping experience and operational efficiency.

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AI enhances supply chain visibility and efficiency by providing real-time updates and insights, which streamline logistics and inventory management processes.

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Customer stories

Automated AI Image Quality Detection Engine for Retail

Teezily, the French-based but globally operating eCommerce company with a unique business model, was looking for an AI solution to improve its performance by automating processes. Addepto Team delivered the computer vision engine for image detection, and proved itself to be a reliable partner in imp...

Teezily had no in-house AI team, but the company was deeply aware of AI potential, so the collaboration was very smooth. We decided to harness the sota computer vision algorithms and build an AI engine able to be incorporated into the Teezily eCommerce system.

Wojciech Drężek Data Scientist – Addepto

AI Compliance Analysis at Retail

Spencer’s is a North American mall retailer with over 600 stores in the United States and Canada. Their stores offer gag gifts, clothing, band merchandise, sex toys, room decor, collectible figures, fashion and body jewelry, and fantasy and horror items. Spencer’s, an American retail company...