Amber Hickman |
Over 70 per cent of customers expect personalised services from retailers, according to McKinsey & Company. Furthermore, 76 per cent report feeling frustrated when their experiences lack a personal touch. The key to meeting these expectations lies in leveraging AI technology.
“With AI, retailers can offer a personalised shopping experience with hyper-relevant product recommendations to each customer,” says Kayla Broussard, chief technology officer for retail at Kyndryl. “This is not just about addressing them by name but also understanding their shopping patterns and preferences, which can be as detailed as predicting what products they might need based on past purchases or their size and colour preferences. This level of personalisation significantly enhances customer satisfaction and loyalty, which are key drivers of retail success today.”
AI is making an impact across all sectors for retail. For example, AI-powered tools help retailers to plan store layouts by analysing customer traffic patterns from heat maps to ensure that high-demand products are placed in high-traffic areas.
Store managers can also monitor stock numbers, analyse purchases and order more products with the help of AI.
“One of the revolutionary aspects of AI is its ability to integrate across various points of sale and inventory systems to provide a unified, real-time view of inventory levels,” says Broussard. “This helps retailers to maintain the right amount of stock based on predicted demand, reducing the cost of overstocking. It also allows for predictive restocking, where AI inventory management algorithms forecast when stock will run low and automatically trigger replenishment orders.”
Loss prevention is another critical area where AI is driving real change.
“Using machine learning models, AI can identify patterns that might indicate fraudulent activities or shoplifting,” explains Broussard. “For instance, AI-powered surveillance cameras can detect unusual behaviours and alert staff immediately. Additionally, AI can be integrated into radio-frequency identification tags to track items in real time throughout the store, which helps prevent theft.”
To capitalise on the many potential benefits of implementing AI, retailers must gather high-quality, accurate data from a variety of sources.
“AI systems are only as good as the data they process,” says Broussard. “AI models trained on incomplete data may develop biases and produce inaccurate predictions. Data must be cleaned and organised to feed into AI systems for effective and reliable retail insights.”
Data centralisation ensures that any analytics tools based on that data produce accurate, actionable insights. Kyndryl helps retailers to get AI-ready, assisting them with data integration by consolidating applications and systems onto a unified platform. For example, Kyndryl helped one of the largest Germany-based retailers – which has over 10,000 stores across 15 countries in Europe – to better connect its IT locations.
“The retailer had previously taken a pragmatic, hands-off approach to IT, allowing each operating company to build and run its own infrastructure,” says Broussard. “This fragmented approach gave each entity control, but it did not support new business objectives such as the creation of a company-wide mobile application for cashiers.”
Kyndryl helped the retailer to adopt a centralised cloud strategy by migrating 170 apps from across 75 legal entities in eight countries.
“We moved all apps onto one cloud system without any business disruption,” says Broussard. “Since the migration, the firm has improved performance across all departments by over 30 per cent. The consolidated data has simplified supply chain logistics, reduced IT spend on new hardware and enabled the firm to grow with new customer demands.”
Discover more insights like this in the Winter 2024 issue of Technology Record. Don’t miss out – subscribe for free today and get future issues delivered straight to your inbox.