Brick and mortar’s latest AI experiment: Smart shopping carts



Today, traditional retailers are competing not only against each other but also against e-commerce — as well as online companies that are opening brick and mortar outposts.

Compounding the pressure is the breakneck pace of technological change.

Customers have experienced self-checkout and the cashless store concept of Amazon Go, and now artificial intelligence attached to the old, familiar shopping cart could reshape the shopping experience.


Are smart carts worth it?

AI designed into the cart may be the next trend that will help customers be more efficient by scanning and identifying goods, suggesting products, storing shopping or “punch” lists and directing customers to items.

Stores profit from the AI-driven carts, because more efficient shoppers take less time in the store, so the more customers can be served in a given time period.

 Read blog: Your retail data determines AI effectiveness 

Smart carts from Caper tackle the job with barcode scanners and card swipers, mounted cameras that use image recognition and weight sensors.

The company additionally claims the tech has raised consumers’ average basket size by 18 percent.

And that’s not to mention the positive word-of-mouth marketing about “the store that has no register lines,” because payment is completed cart-side by the customer.

Although currently customers must scan products before placing them in the cart, the company’s goal is to depend solely on cameras and weight sensors in the carts to automatically recognize products when they’re added.

So far, the technology is at two NYC chain stores, but its potential is far reaching.


Built in cross-selling

AI is particularly helpful for cross-selling: For example, at a home improvement retail specialty store, sheetrock is placed in the cart, and the screen asks if the shopper would like to add paint.

If so, it provides direction to the correct aisle — as well as displays on-screen any related products that are on sale in the store.

The ease of obtaining additional related products enhances the shopper’s experience, and strengthens the retailer’s bottom line.

While cross-selling is not always viewed favorably by shoppers who sometimes perceive associates as “pushy,” incorporating this type of “gentle reminder” feature at a specialty retailer, such as a drug store, may be viewed as helpful — a purchase of cough syrup may lead to a reminder to buy cough drops and menthol rub.

According to Caper, the carts aren’t much more expensive than new, traditional models.

And they are less costly than retrofitting a retailer with Amazon Go-type technology.

 Read blog: 2 years later, Amazon’s retail experiment is still unmatched 

They are also an excellent means of gathering shopper data, analyzing information such as product popularity and floor plans.

Just as a chatbot can be programmed to help an ecommerce retailer increase the size of a shoppers “basket,” smart carts are another method of integrating AI into the customer experience.




Gesture recognition helps retailers gauge shoppers’ real interest



Artificial intelligence can help even the fussiest customer find just the right product, in a fraction of the time it would take without any technological assistance.

While AI has been used in various businesses, including retail, to improve efficiencies, the technology has also been employed to help stores improve the customer experience by providing more personalized service.

Through advanced gesture recognition, retailers can determine the popularity of an item by analyzing shoppers’ facial and hand gestures.

Software analyzes the way shoppers react to a certain item and determines whether the item is a potential sales buster — or a dud.

Just as an online recommendation engine analyzes a shopper’s movement within a site, gesture recognition software “learns” how an item affects a shopper, and can assist the retailer in finding an item that is perfect for a particular user.


Understanding shopping patterns

The ability to know what merchandise has been viewed and ultimately rejected is crucial if traditional retailers want to compete against the likes of Amazon.

Digitally native retailers understand customers’ purchase and shopping habits, because their machine learning models see all the data.

Brick and mortar retailers are far behind in understanding customers’ shopping patterns.

Gesture recognition can arm retailers with predictive power.

By analyzing customer data created by interpreting human gestures using mathematical algorithms, retailers can discover which customers are most likely to buy certain products.


Prescriptive intelligence

As AI advances, businesses will shift from gathering predictive data to prescriptive intelligence.

Once retailers understand why customers buy a product — or why they do not — the next step is to gather intelligence so marketers can illustrate the reasons why shoppers should buy a product.


Sales help

AI has the potential to amplify and augment retailers’ creativity, by providing not only necessary data, but also freedom from time-consuming, mundane tasks.

The key for brick and mortars is to employ AI in ways that provide in-store assistance to human retail associates.

For example, AI that is integrated into inventory systems can quickly and accurately answer repetitive questions such as stock requests, store hours and directions.

Sales associates can then focus on helping and closing deals with customers.

Such tasks can accumulate and chip away at salespeople’s time, leaving them little time to create customer relationships.

Gesture recognition is no different in terms of its potential to enhance customer service.

Salespeople receive accurate insights quickly, providing them with the opportunity to react appropriately.

“AI assistants” can help provide associates freedom from mundane, routine tasks so associates can work on improving personalized customer experiences.

By making appointments, sifting through and prioritizing email and scheduling various tasks, an AI assistant allows the retail associate to shine in pursuit of customer satisfaction.

The first step to recognizing customers with AI



Retailers are increasingly looking to AI to unlock insights that will help you better reach customers.

AI learns from your data to help you recognize customers and anticipate needs – but the conclusions AI will generate are only as accurate as the data that feeds it.

Business author Luis Perez-Breva comments in his article, Why retail’s artificial intelligence bet is all wrong, “Machine learning needs vast amounts of data that needs to be formatted and cleaned for use. Computers aren’t good at automatically cleaning data; humans are.”

With Retail Pro, you already have a solid foundation of structured data.

And, since Retail Pro is a platform software, it acts as the foundation to which you can connect all your other retail technologies, including ERP, WHM, dropship, ecommerce, CRM, email & SMS marketing, loyalty & rewards, and any other technology you use.

When connecting these data sources, your IT team already does the heavy lifting needed to clean and structure your data – so why not make the most of it?

With all your data connected on the Retail Pro platform, you can recognize shoppers and see their activity across channels.

By recognizing your customers and knowing their past purchases and preferences, you can better anticipate their expectations and make your outreach more relevant to their needs.

Request a demo or talk to your Retail Pro Business Partner today to see how you can unify data in Retail Pro for a more holistic picture of your business that helps you anticipate your customers’ needs.

3 Benefits of AI for forecasting and operational efficiency



In retail, making the mark — or missing it — leads to the success — or failure — of the business.

Sales predictions, identifying new customers and developing relationships with trusted partners are all a part of that success, and retailers are gaining greater traction with technologies powered by artificial intelligence.

Here are three benefits of AI for forecasting and operational efficiency.


1: Reducing forecasting biases

In earlier times, company executives worked off of hunches that were based on their experience in the industry and with their companies.

One bad guess and the financial numbers for the quarter were sunk.

A second one and the company could be headed for ruin.

Today, artificial intelligence can be employed to augment the success of executives’ expert hunches, and warn against those ideas that are unlikely to work.

When forecasting is treated as a science rather than a guessing game, companies will receive better results.

In general, people are either optimistic or pessimistic, and their forecasting skills are biased as such.

By using AI, a data-driven rationale is used to come to any conclusion.

Not only does this mean more accurate forecasts, but it also provides the “why” behind the numbers.

In times when the predictions are off, it is simple to go back to the data you feed it from POS like Retail Pro and see what went wrong and adjust for the next quarter.

That type of correction is much easier to adjust than a “gut feeling.”


2: Increase inventory accuracy

Understanding what products your shoppers are purchasing, and at what frequency, allows you to more accurately predict inventory needs.

AI will help reduce unwanted inventory, and, according to consulting firm McKinsey, overall reductions of 20% to 50% are possible.

For example, take AppCard’s “Pinky,” an AI loyalty and personalized marketing system comprising artificial neural networks and other machine learning approaches that are orchestrated and optimized via reinforced learning.

The network’s architecture ensures that Pinky takes into account correlations between transaction data in Retail Pro and neighboring days, weekly periodicity, holidays, weather effects and seasonality.

In addition, Pinky learns quickly and therefore doesn’t require huge amounts of data to be a trained rockstar.

Right now, Pinky can reliably predict revenue and target customers that are at-risk, but soon it will be able to predict a customer’s next visit and optimize target customer lists based on a merchant’s estimated lift.


3: Speed up customer acquisition

In addition, to strengthen existing shopper-retailer bonds, AI can also speed up the process of acquiring new customers.

Take a business that depends on cold calls to increase its customer base.

That’s not a time-efficient way of increasing your customer base, and it’s also expensive.

While LinkedIn and other professional networks are helpful to target potential customers, it’s not much use on its own.

Instead, by using an AI-powered software tool in a coordinated effort with social networking you can find prospects more quickly than a human.

You can automatically send them introductory messages, sync calendars and send meeting invitations.

Cold calling will soon be a thing of the past, replaced by a more targeted, efficient method.


AI learning curve

What happens if AI is employed and doesn’t do as well as the former CEO’s hunches?

Tighter inventories, understanding what customers want and broadening the customer base all benefit a retailer’s bottom line, but the effort is wasted if the company can’t deliver on its promises.

Customers who can’t find product on the shelf are unlikely to return. Loyal customers who find that styles have changed will be disappointed.

It takes a good bit of time for an AI solution to learn the business.

It can only learn as fast as data and experiences are being fed to it.

And remember, it does not forget.

Data and coaching increasingly improve the output.

By learning from mistakes, understanding what knowledge gaps there might be and encouraging continuous improvement, a company can employ AI solutions to seize the opportunity to do better for itself, as well as for its customers.

Holistic data fed into an AI system can help retailers gain actionable insights into how they can improve their business and put shoppers first.

Book your NRF 2019 meeting now to start the conversation on how you can unify data in Retail Pro and start making the most of your most important resource.







Human engagement through Artificial Intelligence



It is a question that every retailer ponders: How are customers engaged with my brand and how can I keep them engaged?

In the past, surveys were a common tool for gauging customer interest, but today’s shoppers are inundated with requests for their opinions and most often those get lost in the shuffle.

Since humans are often too busy or forgetful to be reliable sources of feedback, some retailers are relying on machine learning — artificial intelligence (AI) — to learn if they are succeeding with customers.

Shoppers provide retailers with an abundance of data, simply by voting with their dollars at the POS: What styles or products are popular, what is not trending, what colors are in vogue, etc.

Size, gender and age are among many characteristics that are vital in creating personas, but also, shoppers’ actions are quantified.

The backbone of AI is machine learning; Programs take all that customer purchase history data in POS like Retail Pro, and unify it with other data sources like browsing behaviors, to analyze exactly how customers view a brand, a store, or a style.

Interestingly, shoppers tend to follow some repeated patterns.

For example, a person often buys the same things, behaves in a predictable way and follows similar intuitions.

By learning one buyer’s pattern, another’s might be revealed as well.


Human intuition

A recent survey by retail management firm BRP Consulting reported that 45 percent of retailers were planning to increase the use of AI to improve customer experience over the next three years.

For many years, retailers relied on sales associates’ perceptions to determine how engaged customers were.

But humans can be biased, and that information is therefore inaccurate.

Today, AI can combine the intuitiveness of human employees with a machine’s ability to analyze massive amounts of data in seconds.

AI helps retailers understand consumers, improve worker productivity, boost efficiency as well as raise sales.


AI-generated recommendations

AI is increasingly being integrated into commerce and retail experiences.

A great example of using AI to recognize customers’ preferences is Amazon’s Recommendation Engine.

Shoppers see items similar to ones they have viewed, as well as others that are commonly purchased displayed prominently alongside the item currently being viewed.

Different recommendation “entry points” are integrated into Amazon’s tool as well, which maximizes cart value.

Recommendation engines help retailers forge a relationship with their customers.

Users can click on the “Your Recommendation” link to display a page that contains categorized products that might be of interest, or they can refer to the section containing similar items with previously viewed products.

McKinsey has reported that up-sell technique is responsible for some 35 percent of Amazon’s revenue.

Small wonder why Amazon has decided to make the underlying technology available through AWS with the “Personalize” tool.

Another instance of a successful personalized user experience is Netflix’s extensive “smart” list of movie and TV show suggestions.

Roughly 70 percent of all content watched by subscribers is a personalized recommendation, according to Netflix.

Shoppers enjoy personalization because it makes transactions feel customized, which leads to a feeling of “specialness.”

And predictive technology lets retailers promote products in a targeted way, which provides customers with a curated experience.

Commit to understanding their preferences

By continuously revising the ad content across various marketing mediums, the likelihood of a purchase increases, although retailers must guard against ad fatigue that can easily evolve into ad blindness, ultimately leading to ad blocking.

Customer engagement has always been a top concern for retailers; the cost of cultivating new customers is steep.

Enticing customers to return by demonstrating a commitment to understanding their preferences pays off not just at the cash register, but also in the word-of-mouth advertising that is gained by being intuitive and responsive, which AI solutions are expert at providing.