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 | May 15, 2020
6 must reads for the AEC industry today: May 15, 2020
Nonresidential construction employment sees record loss and Twitter will keep all of its office space.
Market Data | May 15, 2020
Nonresidential construction employment sees record loss in April
The construction unemployment rate was 16.6% in April, up 11.9 percentage points from the same time last year.
Market Data | May 14, 2020
5 must reads for the AEC industry today: May 14, 2020
The good news about rent might not be so good and some hotel developers consider whether to abandon projects.
Market Data | May 13, 2020
House democrats' coronavirus measure provides some relief for contractors, but lacks other steps needed to help construction
Construction official says new highway funding, employee retention credits and pension relief will help, but lack of safe harbor measure, Eextension of unemployment bonus will undermine recovery.
Market Data | May 13, 2020
5 must reads for the AEC industry today: May 13, 2020
How to design resilient libraries in a post-covid world and vacation real-estate markets are 'toast.'
Market Data | May 12, 2020
ABC’s Construction Backlog Indicator falls in April; Contractor Confidence rebounds from historic lows
Nonresidential construction backlog is down 0.4 months compared to the March 2020 ABC survey and 1.7 months from April 2019.
Market Data | May 12, 2020
6 must reads for the AEC industry today: May 12, 2020
A 13-point plan to reduce coronavirus deaths in nursing homes and Bjarke Ingels discusses building on Mars.
Market Data | May 11, 2020
Interest in eSports is booming amid COVID-19
The industry has proved largely immune to the COVID-19 pandemic due to its prompt transition into online formats and sudden spike in interest from traditional sports organizations.
Market Data | May 11, 2020
6 must reads for the AEC industry today: May 11, 2020
Nashville residential tower will rise 416 feet and the construction industry loses 975,000 jobs.
Market Data | May 8, 2020
Construction industry loses 975,000 jobs in April as new association survey shows deteriorating demand for construction projects
Association partner Procore also releases near real-time construction data measuring impacts of coronavirus as association calls for new measures.
