Artificial intelligence (AI) is the next big step for retail and FMCG companies following the implementation of advanced big data and analytics (BDA) solutions, which can unlock huge data volumes in an automated way in real-time and ultimately lead to maximum profitability, according to data and analytics company GlobalData.
The company’s Disruptor Database revealed that although retailers have grown to their current size by capitalizing on profitable bits of digitalization, they are often challenged in understanding what their customers need at scale. There is a colossal amount of customer data with enterprises, but only a handful are able to generate value deemed from low conversion rates of below 5% overall.
This broadens the scope for retailers and consumer goods companies to use predictive analytics to enhance decisions related to supply chain management, customer behavior, staff allocation and the likelihood of goods being damaged, lost or returned.
Rena Bhattacharyya, Technology Research Director at GlobalData, says: “While most analysis related to understanding market trends, achieving greater customer personalization, and improving operational efficiency can be performed with BDA methods, AI in many cases is less cost intensive and faster - at times even instant.. Intelligent machine learning systems can replace expensive armies of data scientists and provide solutions or product recommendations in an automated way. The timing of the analytics is crucial, since opportunities for cost savings or additional sales are frequently limited to minutes or even seconds.”
What made their way through the experimental phase of AI in FMCG and retail are the use cases related to predictive analytics. For example, thanks to the integration of machine learning, eBay is now able to help sellers on its platform with solutions ranging from delivery time to fraud detection. It can also discover gaps in inventory of a particular product and alert related sellers to stock up on that item, as well as make price recommendations based on trending events automatically.
Procter & Gamble used deep learning technology to create a skin advisor service for its Olay brand. After screening millions of selfies and spotting key age characteristics, Olay’s service can provide women with personalized product recommendations based on skin analysis.
Leading retailers including Amazon, Alibaba, Lowe’s and Tesco are developing their own AI solutions for automation, analytics and robotics use cases. At the same time, many retailers have not implemented any AI solutions yet and are likely to fall behind their competitors.
“AI is the path to maximum profitability. It will be the technology platform that reaps the biggest rewards. Retail and FMCG companies looking to launch AI-based solutions should start by understanding the needs of their target customer base, focus on providing an omnichannel experience, and strive to achieve cost savings through greater efficiency,” concludes Bhattacharyya.
Related Stories
Market Data | Sep 2, 2020
Public and private nonresidential construction spending slumps in July
Industry employment declines from July 2019 in two-thirds of metros.
Market Data | Aug 31, 2020
5 must reads for the AEC industry today: August 31, 2020
The world's first LEED Platinum integrated campus and reopening campus performance arts centers.
Market Data | Aug 21, 2020
5 must reads for the AEC industry today: August 21, 2020
Student housing in the COVID-19 era and wariness of elevators may stymie office reopening.
Market Data | Aug 20, 2020
6 must reads for the AEC industry today: August 20, 2020
Japan takes on the public restroom and a look at the evolution of retail.
Market Data | Aug 19, 2020
6 must reads for the AEC industry today: August 19, 2020
July architectural billings remained stalled and Florida becomes third state to adopt concrete repair code.
Market Data | Aug 18, 2020
July architectural billings remained stalled
Clients showed reluctance to sign contracts for new design projects during July.
Market Data | Aug 18, 2020
Nonresidential construction industry won’t start growing again until next year’s third quarter
But labor and materials costs are already coming down, according to latest JLL report.
Market Data | Aug 18, 2020
6 must reads for the AEC industry today: August 18, 2020
The world's first AI-driven facade system and LA's Greek Theatre restoriation completes.
Market Data | Aug 17, 2020
5 must reads for the AEC industry today: August 17, 2020
5 strategies for creating safer hotel experiences and how to manage multifamily assets when residents no longer leave.
Market Data | Aug 14, 2020
6 must reads for the AEC industry today: August 14, 2020
The largest single sloped solar array in the country and renewing the healing role of public parks.