Live and let AI

AI has been one of the most talked about topics in retailing this year, and while its impact online is already evident, we look at what impact it is having in physical stores.

Customer analytics
AI powered systems can analyse customer behaviour and store traffic patterns. By tracking movement and interaction data, retailers can gain insights into customer preferences, shopping patterns, and overall store performance. This information can help optimise store layouts, improve product placements, and enhance the overall customer experience.

M&S uses heat mapping technology to monitor customer movement within their stores. Cameras and sensors capture data on footfall, flows and popular areas of the store, which is analysed in real-time, producing valuable insight into customer behaviour. This enables them to make data-driven decisions around store layout, product placement and optimising operations, which in turn improve the store experience.

Stock management and localisation
AI is becoming an integral component of stock management and optimisation of store product ranges. Algorithms analyse historical sales, behaviour, market trends and external factors to generate demand forecasts, allowing retailers to optimise their stock management. This is increasingly being done at a local level, enabling retailers to curate their product selection at an individual store level to meet the specific preferences of the local customer base, thereby creating more relevant and impactful store experiences.

Walmart uses AI-powered systems (seen above) to create localised product offerings across its store profile. Sales data, customer behaviour and regional trends are analysed to determine which products are most popular in specific store locations, then the product assortment is adjusted accordingly to maximise the sales potential of stock.

Virtual assistants and interactive displays
Retailers are beginning to leverage AI-powered virtual assistants and interactive displays in stores to create more immersive, informative, and personalised shopping experiences. Interactive displays typically involve touchscreen, augmented reality or virtual reality elements where customers can virtually try on products, visualise products in real life settings or gain further product information.

Sephora has recently introduced a Virtual Artist, an interactive display that allows customers to virtually try on makeup products in real-time, allowing them to review products prior to purchasing.

Virtual assistants are a common customer service tool on online channels; however, many retailers are showing interest in developing these in their physical stores. The next few years will see the roll out of this type of technology to provide instant customer support and streamline the purchasing processes by increasing speed of service and product location.

Application of AI in physical stores demonstrates its benefits in creating more seamless omnichannel experiences. Retailers that can harness AI effectively to blend their digital and physical channels seamlessly, with focus on streamlining operational efficiency and enhancing customer experience will likely be more future-proof and successful in retaining customer engagement. With rapid developments driving the sector into a new era, AI powered store processes will be integral to the future of physical retail.

The usefulness of AI, however, is entirely dependent on the quality of the data and the models that feed it, which is one of the key reasons to take a strategic approach to managing and using data. More can be found out about this in our latest white paper, The Power of Data - Transforming Real Estate Performance.

Emily Brown