Behind the scenes of online retail, GenAI is enabling huge change which is generating increased cost efficiencies and additional revenue. However, its benefits are not limited to the online experience.
As we see in the examples that follow, GenAI is being deployed across retailers’ businesses to help deliver a better working environment for those at the heart of the retail industry – whether it is store staff or those at supporting offices, such as a head office or warehouse and fulfilment centres.
And the ROI is both impressive and fast. A report from IDC, commissioned by Microsoft, found that for every dollar invested in AI, retailers are seeing a 3.5X ROI and are gaining productivity savings within 9 to 14 months.
1) Improvements in workforce collaboration
GenAI helps a retail workforce to work together more effectively, for example supporting in store frontline store associates to better do their jobs to generate individual sales while also providing insight for store managers to drive the business at a higher level.
Recently launched functionality from Microsoft allows a store associate to use a copilot template for store operations to, for example, understand the operating procedure to replace damaged products using natural language to understand what needs to be done rather than having to look up policies.
The implementation of GenAI offers a transformative opportunity to engage in natural and intuitive conversations, revolutionising the way tasks are assigned and managed. It can also allow staff to create a task to replace products and send an alert through Microsoft Teams to the store manager.
Managers, meanwhile, can quickly create tasks and assign staff to those tasks to complete, allowing for better communication and collaboration across the workforce. Previously such tasks would have had to be manually created, assigned, and then managed in a complex workflow.
2) More intelligent planogram creation at Canadian Tire
Successful physical retail depends on localising stores to the needs of local customers. This has been a challenge faced in the past for North American general merchandise retailer Canadian Tire, which is now using GenAI to develop planograms specific to individual store locality.
Speaking recently at NRF, Ilana Santone, svp of digital and connected retail at Canadian Tire said: “One of our biggest challenges is empowering our dealers to localise the assortments in their stores through customising the planograms and showing customers the products in that market that they would most like to see.”
“So, we created a product called Tetris which is taking multiple sources of data – customer data and preferences and store specific data such as POS data – and provides our dealers a tool that allows them to localise the store based on sales and those data points.”
Santone said about half of the retailer’s stores had now customised their planograms and had seen an increase in sales and customer experience as a result.
3) AI streamlines routine tasks, empowering teams to focus on innovation
Another specific use case of retailers using GenAI to improve the lives of their workforce comes from Walmart. It launched its GenAI-powered ‘My Assistant’ app last summer to give 50,000 non-store associates, including those at head office, help with a range of tasks that range from summarising lengthy documents to helping them to create new content.
The app uses a blend of Walmart propriety data technology and large language models (LLM) in Azure OpenAI Service.
Putting such power into the hands of so many is a mass freeing up of staff from monotonous repetitive tasks that allow them to better focus their efforts on the customer experience even for staff who are not customer-facing.
Ikea has introduced an AI technology that analyses short-term demand patterns across various channels and helps forecast customer preferences. The initiative has improved forecast accuracy, operational effectiveness, and customer experience. Ikea Portugal serves as a remarkable example of market success as forecast accuracy has been improved overall by 5%.
It has also enabled co-workers to focus more on strategic decisions and stakeholder relations.
“AI has been a game-changer for us, making our routine tasks easier with the use smart models. However, the tool is only as good as the data it provided. The real heroes here are our co-workers, as they bring invaluable insights and always ensure the quality of data is their.” – said Ikea chief digital officer Parag Parekh.
4) Technology to help in store staff focus on customers
Freeing up staff to focus on other tasks is a key enabler of GenAI and can be done instore with in store staff too.
Microsoft’s copilot template for store operations, for example, allows retailers to build a GenAI-powered LLM-based assistant, as Walmart has already done with its non-store staff, that enables staff to ask questions and receive answers about store documentation such as operating procedures and natural language-based task creation like form filling.
This focus on natural language allows store associates to use GenAI functionality to access the information they need quickly and easily to do their jobs more effectively, improving efficiency to drive cost savings and service to boost sales.
At fashion retailer Lindex, the company has developed Lindex copilot, an AI tool that integrates ChatGPT into its Azure infrastructure to offer assistance in store and improve customer service.
5) Make the most of data
Improved GenAI will also allow retailers to make more of their data with the ability to better unify data from disparate systems to gain insights. This challenge of a single source of truth that brings together and consolidates data from multiple systems to allow them to unlock such insights has long been an obstacle.
New retail data solutions functionality in Microsoft Fabric now better enables retailers to do that.
Meanwhile the reference application template for smart store analytics in Microsoft Cloud for Retail can help give retailers valuable insight into their operations, using AI to provide KPIs and data around anything from number of shoppers to basket size, checkout time and unit sales against customer height.
The natural language power of GenAI offers rich opportunity for improving workplace functionality in retail that simply cannot be ignored.
Read more about Microsoft AI capabilities for Retail: Microsoft introduces new capabilities that help retailers bring AI to the shopper journey and enhance store associate experiences
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