AI transformation in the retail industry

As I speak to retailers and partners across the world I continue to be blown away by the pace and scale of AI-driven change in the retail industry. From the realization of conversational commerce to AI-driven supply chains and breathtaking innovation, it’s unlike anything I’ve ever seen or experienced in my entire career. From CarMax to Coles, ?abka to Zegna, I also feel a deep sense of pride (and excitement) about how Microsoft is helping retailers of all shapes and sizes drive true business value from their AI investments. So here’s a look at some of that work across 4 key areas that many of us who’ve been a around a while might call the “retail fundamentals:”??

• Reimagining customer experiences??
• Enriching employee experiences??
• Reshaping business processes??
• Bending the innovation curve??

Reimagining customer experiences?

For as long as I’ve been in the retail industry, we’ve been trying to crack the ‘personalization paradigm.’? Consumers crave personalization. Some retailers do it. Many fail to deliver on the promise. Take online shopping. Too often it feels like we’re scrolling through hundreds and hundreds of search results. In many ways the search bar feels like the universal symbol of disappointment. Through the use of AI, we’re helping retailers to change that.??

From Carrefour’s Hopla chatbot that’s helping customers with their daily shopping on?carrefour.fr to Canadian Tire’s shopping assistant, CeeTee which helps customers easily select the right tires for their vehicles, retailers are making the shift from ‘scroll-based shopping’ to ‘goal-based shopping’ and in the process providing a more personalized shopping experienced. In India, their largest online fashion retailer, Myntra is using generative AI to help shoppers figure out what they should wear for a specific occasion. And let’s not forget Walmart who announced new generative AI-powered capabilities for shoppers?earlier this year at CES. Planning a unicorn-themed party for your daughter? Help is on hand!?

Enriching employee experiences?

One of the things I love most about the retail industry is no matter how much tech we throw at it we’re still a people-first business. Every leader I talk to is looking for ways to help their people be more productive and remove the drudgery of work. Take Swedish fashion retailer Lindex who created "Lindex Copilot," an AI tool that leverages ChatGPT within Azure to offer real-time support to store staff, streamlining operations and elevating the customer experience. And Walmart launched?a new tool, giving its 50,000 non-store associates access to its new “My Assistant” app, which leverages a unique build of Walmart proprietary data, technology and large language models in Azure OpenAI Service. The app is helping? associates with a range of tasks, from summarizing long documents to assisting in the creation of new content.?

Reshaping business processes?

Albert Heijn is the Netherlands’ leading supermarket chain and really a great example of a traditional retailer transforming to become a food tech company. Through a series of AI initiatives they’re now using AI for everything from customer personalization to demand forecasting and food waste prevention. Spar Group one of the largest retailers in Austria & Eastern Europe has transformed their supply chain with AI. Not only are they accelerating the delivery of fresh produce, ensuring fruits and vegetables reach customers three days earlier but they boast inventory prediction accuracy levels exceeding 90%. There’s more though! Only around 1% of groceries at SPAR Austria now remain unsold.?

And Down Under, Australian retailer?Coles?developed an edge computing platform using several AI models that makes 1.6 billion informed predictions each day so customers can find exactly what they are looking for across its 850 stores. Coles calculated that this work would have required nearly 100 times the current head count to complete in the same amount of time.?

Bending the innovation curve??

On the innovation front look no further than Polish convenience chain ?abka. They’ve set a new bricks-and-mortar store standard with their unmanned Nano stores powered by AiFi and Microsoft Cloud for Retail. Put simply Zabka wants going to one of their stores to be like opening the door to your fridge. And in China, McDonald’s China established an AI Lab to accelerate its AI journey. Putting its initial focus on augmenting training at the company’s education center, Hamburger University, the team empowered students with AI assistants, enhanced search, and document translation. Professors at China Hamburger University are now also using AI to prepare new teaching materials in a more standardized format.??

Looking to the future?

I’m proud that Microsoft is partnering with so many retailers to help them solve their most complex challenges and deliver real business outcomes with the help of AI. As I look ahead, it’s clear that this new era of AI transformation will be the foundation upon which our industry will be built and I can’t wait to help more retailers achieve more with AI!?

Don’t forget to engage here on LinkedIn and let me know your thoughts on how you’re thinking about AI and using it in your retail business.??

- Shelley?