“Artificial Intelligence is taking over retail and has been used across the entire product and service cycle.
- Flipkart which was acquired by US retail giant Walmart this year is using machine learning (ML) to arrive at a structured address classification system for order deliveries,
- The ML solution classifies and resolves inconsistencies with a 98% accuracy rate.
AI-powered visual aided picking (within warehouses/ distribution centers)
- As report indicated, Physical forms of AI are now extending beyond chatbots to robots in the warehouse. The AI robots markets is expected to grow at 28.8% CAGR between 2017 and 2023.
- German-based ecommerce player Otto: The AI system predicts customer purchases at 90% accuracy, thereby reducing product returns by over two million items a year.
AI for stock replenishments
- AI-driven insights from varied data sets offer significant scope to automate stock replenishments.
- This allows the company to predict demand down to the individual store level and then automates the product orders. As a result, shelf gap was found to be reduced by 30% during trial sessions.36
AI for assortment rationalization
- Global fashion retailer H&M faced a significant challenge: $4 billion worth of unsold stock
- The number of SKUs reduced by 40% as a result”
“Cross pointed to the fact that Walmart already uses AI to solve ‘last mile’ delivery issues, while German ecommerce brand Otto Group uses a cloud-based machine-learning system that has reduced its out-of-stock rates by 80 per cent.
Anyone asking if robots will really take your job is in fact, woefully behind the times – change is already afoot. Earlier this week, House of Fraser’s logistics operators XPO announced the deployment of 5,000 intelligent robots across its warehouses in Europe and the US.
“The rise of automation through AI will have a much more significant impact on retail than other industries” said Sutherland director of retail Christopher Schyma.
“This is the result of the changing retail industry – today’s customer requires digital-first experiences, where needs are met and expectations exceeded across a variety of touch points and at the complete convenience of the shopper.“
“The challenge for retailers is that they lack connected systems. Thirty-six percent of survey respondents indicated that they have separate demand planning, replenishment, allocation and order management systems for store and ecommerce orders. Combined with the fact that 28 percent don’t manage each of their modules on the same platform, it becomes clear that disparate demand replenishment systems are a significant burden to efficiency.
AI and machine learning holds enormous potential to improve supply chain efficiency, and forward-looking retailers are already investing in these technologies. Retailers say AI’s greatest potential to improve supply chain management relates to quality and speed of planning insights, while nearly half of all respondents identified ‘demand management’ as one of the top three areas for AI in the next five years.”