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 | Nov 5, 2019
Construction and real estate industry deals in September 2019 total $21.7bn globally
In terms of number of deals, the sector saw a drop of 4.4% over the last 12-month average.
Market Data | Nov 4, 2019
Nonresidential construction spending rebounds slightly in September
Private nonresidential spending fell 0.3% on a monthly basis and is down 5.7% compared to the same time last year.
Market Data | Nov 1, 2019
GDP growth expands despite reduction in nonresident investment
The annual rate for nonresidential fixed investment in structures declined 15.3% in the third quarter.
Market Data | Oct 24, 2019
Architecture Billings Index downturn moderates as challenging conditions continue
The Architecture Billings Index (ABI) score in September is 49.7.
Market Data | Oct 23, 2019
ABC’s Construction Backlog Indicator rebounds in August
The primary issue for most contractors is not a lack of demand, but an ongoing and worsening shortage of skilled workers available to meet contractual requirements.
Multifamily Housing | Oct 16, 2019
A new study wonders how many retiring adults will be able to afford housing
Harvard’s Joint Center for Housing Studies focuses on growing income disparities among people 50 or older.
Market Data | Oct 9, 2019
Two ULI reports foresee a solid real estate market through 2021
Market watchers, though, caution about a “surfeit” of investment creating a bubble.
Market Data | Oct 4, 2019
Global construction output growth will decline to 2.7% in 2019
It will be the slowest pace of growth in a decade, according to GlobalData.
Market Data | Oct 2, 2019
Spending on nonresidential construction takes a step back in August
Office, healthcare, and public safety are among the fastest-growing sectors, according to the U.S. Census Bureau's latest report.
Market Data | Sep 27, 2019
The global hotel construction pipeline ascends to new record highs
With the exception of Latin America, all regions of the globe either continued to set record high pipeline counts or have already settled into topping-out formations amidst concerns of a worldwide economic slowdown.