Data is simply a numerical form of feedback about a retail business. The dreaded stocktakes are one way retailers manually gather data, but most forms of data are now supplied as a result of digitisation – ecommerce and point of sale systems are two of the richest and most accessible data sources for retailers.
You can find more information about data in another story in our Five Days of Finance series, Driving retail sales with big data.
The sheer volume of data faced by modern retailers is where AI enters the picture. Most retailers have better things to do with their time than sort through thousands of lines of data, so AI engines have been created to take over the analysis.
Their exact function varies depending on what they’ve been trained to do – AI technology has applications across everything from supply chain management to fraud prevention. A global Capgemini survey of 400 retail executives indicates AI may help retailers save as much as US$340 billion each year.
Wellington ecommerce retailer Adult Toy Megastore created an AI engine in-house to assess competitors’ pricing in the market and adjust its own pricing to continuously offer customers the best possible prices.
Consumer electronics retailer Noel Leeming has taken a more customer-facing approach with its AI programme, rolling out a new ‘digital human team member’ named Nola at its recently-opened flagship in Westfield Newmarket.
Nola is intended to provide wayfinding and customer services support to customers, and will learn like a human being as she gains more experience interacting with shoppers.
Chief executive Tim Edwards said Noel Leeming sees Nola as a new way customers can interact in-store, and the company is committed to growing the AI’s use across platforms.
The Capgemini survey cautions that many retailers are pursuing complex use cases and missing “easy-to-win AI opportunities”. It suggests adding AI capabilities to existing websites, chat boxes or fulfilment route plans, augmenting AI insights with external data sources, considering the customer’s point of view when choosing AI use cases, and treating AI as a strategic imperative.
Latitude’s Chief Country Officer for New Zealand, David Gelbak, says retailers without the scale to develop their own AI engines can access AI analytics through partners like Latitude.
“We actually spend a lot of time and effort providing data back to our retailers who originate customers, or even if they don’t originate customers but customers use our products in their stores,” he says.
Latitude has more than 400,000 customers in New Zealand, so it can aggregate pools of data over time to provide valuable insights while respecting each individual’s right to anonymity.
With these insights on board, retailers can make more informed choices about their retail strategy and core sales strategy.
This story was created with the support of Gem powered by Latitude.