Artificial intelligence is already revolutionising retail

By: Trademagazin editor Date: 2024. 04. 04. 11:32

In this article we would like to show – by using practical examples – that artificial intelligence (AI) is no longer just a promising future technology, but an increasingly dominant part of the present of retail trade.

This article is available for reading in Trade magazin 2024/4

AI-enabled developments such as automated inventory management, dynamic pricing, improved customer satisfaction, and fine-tuning logistics efficiency make it possible for retailers to respond almost instantaneously to rapid changes in consumer demand.

Improving the customer experience (L’Oréal and Sephora)

Beauty players have long focused on the customer experience, and with the help of AI they can now offer more personalised care online. L’Oréal has developed an AI-powered app with personalised skin care and cosmetics advice features. The app analyses the skin types, preferences and expected benefits of users to create personalised product recommendations from the brand’s range. Popular French cosmetics chain Sephora is also using AI-based chatbots and virtual assistants on its website and mobile app.

More efficient inventory management and demand forecasting (OXXO)

One of Mexico’s largest convenience stores chains, OXXO, is using AI-based solutions to improve its inventory management and demand forecasting capabilities, by this optimising store shelf stocking times and product placement to make the entire supply chain more efficient. The AI solutions they use are based on machine learning technology, and the improvements will enable OXXO to predict which products will be popular in different regions at different times of the year.

Personalised promotions (Kroger) and taking food safety to the next level (Tyson Foods)

AI also promises significant efficiency gains in pricing and promotions. Kroger, a US supermarket chain with more than 2,800 stores, is using AI on its website and mobile app to efficiently create personalised offers and promotions. Data stored in Kroger’s loyalty programme is analysed to give relevant product offers and discounts, increasing sales revenue and purchase frequency per shopper, while also improving the customer experience. Tyson Foods, the second biggest chicken, beef and pork processor in the world, has developed a blockchain-based AI solution that can identify food safety risks originating in the supply chain. By analysing the data stored in the blockchain, the system is able to alert the Tyson Foods staff if a product has experienced a failure in the transport or cold chain.

Many of us know it, but few of us use it

According to an AI survey conducted by GKID in February 2024, AI awareness is already relatively high among Hungarians. 74% of internet users say they know what AI means, only 5% say they don’t know what it means, 17% aren’t sure about the concept, while 4% are unsure whether they are approaching the concept from the right angle. One of the key findings of the research is that the general public understanding of AI is based on very little first-hand experience. //

What is blockchain technology?

A blockchain is a decentralized database that records data in chronological order, using a cryptographic process so that data can’t be modified or tampered with. Artificial intelligence integrated with the blockchain can be effectively used to analyse the stored data. //

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