ARTIFICIAL INTELLIGENCE &

ITS APPLICATION IN OMNI-

CHANNEL

Submitted to DR. Sibichan K. Mathew

Submitted by :
Ehtesham Iftekhar | Himani Verma | Purnima Ranjit
1. AI : Concepts and its Subsets

1.1 Definitions

Mathematician Alan Turning changed history with a simple question, "Can

machines think?" In his paper, "Computing Machinery and Intelligence"
(1950), and it's subsequent Turing Test, established the fundamental goal and
vision of artificial intelligence.
But the field of AI wasn't formally founded until 1956, at a conference at
Dartmouth College, in Hanover, New Hampshire, where the term "artificial
intelligence" was coined by Simon. McCarthy.

Artificial Intelligence is a wide-ranging branch of computer science concerned

with building smart machines capable of performing tasks that typically require
human intelligence. It is an interdisciplinary science with multiple approaches,
but advancements in machine learning and deep learning thus, creating a
paradigm shift in virtually every sector of the tech industry.

Tesler's Theorem says "AI is whatever hasn't been done yet. The goals of AI
has been listed below :
Reasoning & Problem Solving
knowledge representation
Planning,
Learning,
Natural language processing,
Perception
Ability to move and manipulate objects.
Social Intelligence

Frequently, when a technique reaches mainstream use, it is no longer

considered artificial intelligence; this phenomenon is described as the AI
effect. Modern machine capabilities generally classified as AI include
successfully understanding human speech, competing at the highest level in
strategic game systems (such as chess and Go),autonomously operating
cars, intelligent routing in content delivery networks, and military simulations.

The various subsets of AI are as follows -

● Machine Learning
● Deep Learning
 ● Natural Language processing
● Expert System
● Machine Vision
● Speech Recognition

1.2 Machine Learning

Machine learning is a part of AI which provides intelligence to machines with

the ability to automatically learn with experiences without being explicitly
programmed.
● It is primarily concerned with the design and development of algorithms
that allow the system to learn from historical data.
● Machine Learning is based on the idea that machines can learn from
past data, identify patterns, and make decisions using algorithms.
● Machine learning algorithms are designed in such a way that they can
learn and improve their performance automatically.
● Machine learning helps in discovering patterns in data.

Machine learning can be subdivided into the main three types:

● Supervised learning:
Supervised learning is a type of machine learning in which machines
learn from known datasets (set of training examples), and then predict
the output. A supervised learning agent needs to find out the function
that matches a given sample set.
● Unsupervised learning:
Unsupervised learning is associated with learning without supervision or
training. In unsupervised learning, the algorithms are trained with data
which is neither labeled nor classified. In unsupervised learning, the
agent needs to learn from patterns without corresponding output values.
Unsupervised learning can be classified into two categories of
algorithms:
a. Clustering
b. Association
● Reinforcement learning:
Reinforcement learning is a type of learning in which an AI agent is
trained by giving some commands, and on each action, an agent gets a
reward as a feedback.Using these feedbacks, the agent improves its
performance.
Reward feedback can be positive or negative which means on each
 good action, the agent receives a positive reward while for wrong
action, it gets a negative reward.
Reinforcement learning is of two types:
a. Positive Reinforcement learning
b. Negative Reinforcement learning

1.3 Natural Language processing

Natural language processing is a subfield of computer science and artificial

intelligence. NLP enables a computer system to understand and process
human language such as English.
NLP plays an important role in AI as without NLP, AI agents cannot work on
human instructions, but with the help of NLP, we can instruct an AI system on
our language. Today we are all around AI, and as well as NLP, we can easily
ask Siri, Google or Cortana to help us in our language.
Natural language processing application enables a user to communicate with
the system in their own words directly.
The Input and output of NLP applications can be in two forms:
● Speech
● Text

1.4 Deep Learning

Deep learning is a subset of machine learning which provides the ability for
machines to perform human-like tasks without human involvement. It provides
the ability for an AI agent to mimic the human brain. Deep learning can use
both supervised and unsupervised learning to train an AI agent.
● Deep learning is implemented through neural networks architecture
hence also called a deep neural network.
● Deep learning is the primary technology behind self-driving cars,
speech recognition, image recognition, automatic machine translation,
etc.
● The main challenge for deep learning is that it requires lots of data with
lots of computational power.

1.5 Expert Systems

 ● In artificial intelligence, expert systems are the computer programs that
rely on obtaining the knowledge of human experts and programming
that knowledge into a system.
● Expert systems emulate the decision-making ability of human experts.
These systems are designed to solve the complex problem through
bodies of knowledge rather than conventional procedural code.
● One of the examples of an expert system is a Suggestion for the
spelling error while typing in the Google search box.
● Following are some characteristics of expert systems:
○ High performance
○ Reliable
○ Highly responsive
○ Understandable

1.6 Machine Vision :

● Machine vision is an application of computer vision which enables a

machine to recognize the object.
● Machine vision captures and analyses visual information using one or
more video cameras, analog-to-digital conversations, and digital signal
processing.
● Machine vision systems are programmed to perform narrowly defined
tasks such as counting objects, reading the serial number, etc.
● Computer systems do not see in the same way as human eyes can see,
but it is also not bound by human limitations such as to see through the
wall.
● With the help of machine learning and machine vision, an AI agent can
be able to see through walls.

1.7 Speech Recognition

Speech recognition is a technology which enables a machine to understand

the spoken language and translate into a machine-readable format. It can also
be said as automatic Speech recognition and computer speech recognition. It
is a way to talk with a computer, and on the basis of that command, a
computer can perform a specific task.
There is some speech recognition software which has a limited vocabulary of
words and phrases. This software requires unambiguous spoken language to
understand and perform specific tasks. Today's there are various software or
devices which contain speech recognition technology such as Cortana,
Google virtual assistant, Apple Siri, etc.

We need to train our speech recognition system to understand our language.

In previous days, these systems were only designed to convert the speech to
text, but now there are various devices which can directly convert speech into
commands.
Speech recognition systems can be used in the following areas:
● System control or navigation system
● Industrial application
● Voice dialing system

There are two types of speech recognition

1. Speaker Dependent
2. Speaker Independent

2. Types of AI
Artificial intelligence generally falls under two broad categories:

2.1 Narrow AI

Sometimes referred to as "Weak AI," this kind of artificial intelligence operates

within a limited context and is a simulation of human intelligence. Narrow AI is
often focused on performing a single task extremely well and while these
machines may seem intelligent, they are operating under far more constraints
and limitations than even the most basic human intelligence. Much of Narrow
AI is powered by breakthroughs in machine learning and deep learning.
Narrow AI is all around us and is easily the most successful realization of
artificial intelligence to date. With its focus on performing specific tasks,
Narrow AI has experienced numerous breakthroughs in the last decade that
have had significant societal benefits and have contributed to the economic
vitality.A few examples of Narrow AI include:
● Google search
● Image recognition software
● Siri, Alexa and other personal assistants
● Self-driving cars

2.2 Artificial general intelligence

It is very different,sometimes referred to as "Strong AI," It is the type of

adaptable intellect found in humans, a flexible form of intelligence capable of
learning how to carry out vastly different tasks, anything from haircutting to
building spreadsheets, or to reason about a wide variety of topics based on its
accumulated experience.This is the sort of AI more commonly seen in movies.

3. Relevance of AI Enabled Solutions in

Omni-Channel
The use of AI in the fashion industry of 2020 has become so well entrenched
that 44% of the fashion retailers (who have not adopted AI) are today facing
bankruptcy. As a result of this, global spending on AI technologies by the
fashion & retail industry is expected to reach $7.3 billion each year by the year
2022.

3.1 Optimizing InStore Experience

1. The ‘endless aisle’ technology equips Adidas and Reebok franchise
stores with iPads where shoppers can browse and order for items that
are not in stock at the physical stores. The group has managed to
 transform its 227 offline stores in the past seven months. By end 2017,
this number is likely to jump to 750 stores.

2. Digital kiosks present in the stores to enable product search.

3. Smart Beacons detect customers, profile them and redirect them within
stores. Beacons are installed at various points in the retail store such as
entry, exits, and various sections. As and when customers with
smartphone and app installed walk by these beacons, their location is
uploaded to a server. The server based upon customers’ location, and
purchase history can send customized offers (even when he is just
passing by the store). For example, Virtuous Retail deployed 300
beacons across its shopping center in Bengaluru10.

4. Interactive Mirrors in Fitting Rooms allow shoppers try and compare

different outfits by snapping pictures of them in each outfit for them to
then compare them side by side to help them make a decision quickly
without wearing it. They may also give the user the option to contact a
stylist, change the lighting, and attach the items she has tried on during
the visit to a personal profile so they can be accessed during future
visits to store.

5. Starbucks was able to expand the scope of its loyalty program through
tie up with other Retail stores.

6. Self Check out Service

7. Click & collect Service

8. No Check Out : Concept grocery store without the cashiers and

checkouts, enabling customers to pick the selected products and leave
the store. AI based sensors track the picked products and charge it to
customer’s account on exit.

3.2 Optimizing Online Experience

1. AI-enabled computer vision based visual search technology allows

retailers to suggest thematically or stylistically related items to shoppers
in a way they would struggle to do using a text query alone.AI-enabled
computer vision based visual search technology allows retailers to
suggest thematically or stylistically related items to shoppers in a way
they would struggle to do using a text query alone.
2. Subscription and auto replenishment
 3. Ship from Store Facilities.

3.3 Optimizing Supply Chain & Order Processing

1. Drone based deliveries

2. Use of RPA to automate financial functions

3. Tesco feeds weather data into its predictive analytics tool to forecast
demand of weather-dependent products (such as coleslaw and ice
cream), and adjusts inventory and supplier orders in advance on a
store-by-store basis to minimize missed revenue.

4. LivePerson’s AI-driven conversational platform, Maven, facilitates

customer support by measuring consumer intent and sentiment
while determining where a conversation should go next. Maven also
juggles every conversation simultaneously, whether it’s being held by
human, bot, third-party tech or a combination of all three.

5. Uptake uses AI and machine learning to analyze data for telematics

with the goal of predicting failure in order to reduce downtime for a
variety of vehicles and machinery, including trucks, cars, railcars,
combines and planes.

6. Using worxogo’s AI-based digital coach, mia, Titan sales team was
able to:
● Get 75% of the sales team to hit their targets consistently
● Increase focus-product sales by 20%
● Increase sales spread & engagement with the long tail
● Increase sales performance in double digits
● Reduce month end-skews yielding a steady sales trend through
the month
● Increase usage of existing CRMs and other tools.

3.3 Customer Exposure

1. Dynamic ads on PCs and mobile devices. The algorithms behind these
ads learn how individuals respond to various creative versions or
featured products. By considering product selection, images, taglines,
formatting, colour, copy and call to action, the technology then
 automatically serves –from trillions of permutations – the ad variation
that is most relevant to an individual at a specific point in time.

2. Personality computing AI models can help reducing the cost of

advertising campaigns by adding psychological targeting . Predictive
analysis of social media profiles of customers for targeted marketing
and micro segmentation based Digital Marketing.

3. The type of ad and the frequency of exposure of ads can be

determined by the type of customer and the type of product. For
example AI can be applied to differentiate between items that are a rare
/ one-time purchase (e.g. a car or a furniture), as opposed to one that
will be regularly replenished (e.g. bread or toilet paper). These insights
prevent customers from being overwhelmed by BMW ads when what
they really need is to be reminded that they are running out of
toothpaste.

4. Audio Ads : Spotify ran ads asking users to utter verbal commands to
play a podcast it was promoting. Pandora, too, has recently been
serving some of its users voice-enabled ads from brands like Doritos,
Ashley HomeStores and, yes, Hellmann’s mayonnaise. They use voice
recognition software to analyze vocal feedback and trigger a follow-up
message — or a sequence of ads in some cases — based on the user’s
response.
4. Examples from around the world

4.1 Designer Shoe Warehouse (DSW)

Designer Brands (often referred to as Designer Shoe Warehouse) is an

American footwear retailer of designer and name brand shoes and fashion
accessories. The retailer has over 500 stores in the United States and an e-
commerce website.The company also owns private-label footwear brands
including Audrey Brooke, Kelly & Katie, Lulu Townsend, and Poppie Jones.
Adoption of AI :-

● Virtual Assistant - DSW partnered with SmartAction and developed a

Virtual Assistant to greet the customer in a personalized and contextual
manner, identify and authenticate unknown callers, discover caller
intents, and route to the right Shoe Lover. Just through authentication
alone, this resulted in an 85% success rate – which represented a major
handle time savings for DSW. From there, DSW added several self-
service destinations, including order management (identify order status,
update shipping address, etc.), account management (password reset,
etc.), and rewards management (update account addresses, etc.).
As a result, DSW was able to save $1.5 million in agent handle time
reduction and call deflection. The Virtual Agent played a pivotal role in
reducing DSW's average agent handle time by 2 full minutes, which
represents a huge gain in their ability to scale in the next few years
without adding additional staff. Most importantly, DSW has recognized a
30% lift on their CSAT scores within their contact center.

● Chatbots - DSW uses Narvar chatbot to share real-time information

with customers after they complete their purchase.They are also using
another chatbot, the DSW Gift Concierge, Which is a shopping assistant
that helps customers find holiday gifts.With the chatbot, customers can
receive follow-up messages about the delivery of their recent purchase
and request to change their delivery address or time slot. With the DSW
Gift Concierge, customers can search for the perfect gift by selecting a
category (men’s, women’s or kid’s) and then choosing the personality of
the gift recipient. The chatbot displays suggestions filtered by price point
in a matter of minutes. It makes finding the right holiday gift faster and
less stressful.
 ● Concept Store - To innovate its brick-and-mortar presence, DSW came
with their concept store which features the following things :-
1. Video Tunnel- It is an immersive and exciting feature that makes
customers feel as if they’re flying over a city, swimming
underwater or walking through a desert . In reality, they’re
traveling down an escalator into the new DSW sales floor, where
more unique experiences await.
2. Arcade game- Customers can also win a pair of sneakers by
playing an arcade style game called the Heat Vault Keymaster,
which challenges players to retrieve a pair of kicks in two moves
by inserting a key into a keyhole using a joystick.
3. Shoevator - The store’s display wall of shoes includes three
elevator lifts, serviced from a mezzanine over the sales floor.
Customers order shoes from the wall via the DSW app or a tablet
located at a nearby kiosk, which alerts an associate on the
mezzanine. The associate receives the order, retrieves the shoes
and sends it to the sales floor in a numbered bin by way of the
“Shoevator,” where the customer picks it up.

4.2 Warby Parker Eyewear

Warby Parker, is an American online retailer of prescription glasses and

sunglasses, based in New York City. Warby Parker primarily sells products
through its website, but also features retail locations in the U.S. and Canada.
Adoption of AI :-

● Virtual Try - On - Warby Parker introduced Virtual Try-On that

allows customers to try on virtual frames through augmented
reality, a technology that overlays computer-generated images
(frames) onto real-world images (your face). The app uses
Apple’s Face ID that uses 30,000 invisible dots and an infrared
image to create a map of a customer’s face. With the specific
details of your face tracked, the tool can recommend frames best
suited for your face. This enhances the experience of the
previous digital try-on system because it gives a 3-D preview of
your faces and uses augmented reality to place the frames.

4.3 Walmart
Walmart Inc. is an American multinational retail corporation that operates a
chain of hypermarkets, discount department stores, and grocery stores,
headquartered in Bentonville, Arkansas. The company was founded by Sam
Walton in 1962 and incorporated on October 31, 1969.
Adoption of AI :-
● Pick-Up Towers - Walmart launched Pick-up Towers in some of its
stores that are 16 x 8-foot self-service kiosks conveniently located at the
entrance to the store that retrieves online orders for customers.
Customers can just scan a barcode on their online receipt and within 45
seconds the products they purchased will appear on a conveyor belt.

● Facial Recognition - One of the new ways Walmart introduced in its

operations is facial recognition technology to identify unhappy or
frustrated shoppers. As the machines learn to identify different levels of
frustration through the facial expressions of those in line, it could trigger
additional associates to run the checkouts and eventually could analyze
trends over time in a shoppers’ purchase behavior.

4.4 Tommy Hilfiger

Founded in 1985, Tommy Hilfiger delivers premium styling, quality and value
to consumers worldwide under the TOMMY HILFIGER and TOMMY JEANS
brands, with a breadth of collections including HILFIGER COLLECTION,
TOMMY HILFIGER TAILORED, men’s, women’s and kids’ sportswear, denim,
accessories, and footwear. In addition, the brand is licensed for a range of
products, including fragrances, eyewear, watches and home
furnishings.Tommy Hilfiger, which was acquired by PVH Corp. in 2010, is a
global apparel and retail company with more than 15,000 associates
worldwide. With the support of strong global consumer recognition, Tommy
Hilfiger has built an extensive distribution network in over 100 countries and
more than 2,000 retail stores throughout North America, Europe, Latin
America and the Asia Pacific region. Global retail sales of the TOMMY
HILFIGER brand were US $8.5 billion in 2018.
Adoption of AI :-
● Digital Showroom- As part of its digital strategy, Tommy Hilfiger
wanted to streamline its sales processes and shorten the window
between retailer previews of new collections and actually delivering
those new products to stores. At the same time, the company wanted to
minimize the need to produce and transport samples: reducing costs
 while maintaining the company’s ongoing drive towards sustainability
and corporate responsibility by minimizing the environmental impact
that comes with sample creation and shipping throughout the supply
chain.Tommy Hilfiger introduced the industry’s first, global, digital
showrooms. By allowing buyers to browse collections, view pieces, and
create custom laydowns and orders via touchscreen workstations and a
theater of ultra-high-definition 4K screens, the showroom offers a
forward-thinking approach to the sales process. It removes the need to
create, examine, and deliver samples to retail locations around the
world for every new collection. As a result, Tommy Hilfiger was able to
deliver transformational, engaging experiences to partners as they
browse and buy from the season’s new collection. With the Digital
Showroom, Tommy Hilfiger was able to cut sample production by 80
percent in European headquarters, and it’s doing the same with digital
showroom locations globally.

● Improve the Design process - Tommy Hilfiger announced a

partnership with IBM and the Fashion Institute of Technology to
leverage AI to improve its designs. The project is called Reimagine
Retail and it focused on using AI to identify future industry trends and
improve the design process. IBM’s AI research tools were used to
analyze customer sentiment related to each of Tommy Hilfiger’s clothing
items and runway images as well as to identify key themes in patterns,
silhouettes, colours and styles. AI enabled the quick analysis of a large
database of both text and visual data, something that would be difficult
or impossible for any designer to do on their own. For example,
questions such as “how did this shirt style perform five seasons ago?
What color schemes are trending now? Is this trend close to being
over?” and “what was our most popular piece in the last three runway
collections?” can now be answered almost instantly with the use of
IBM’s AI research tools. It alleviates the pressure on the designer to
find all of these answers so that they can focus on the most important
part of their jobs, design.

4.5 IKEA

IKEA is a Dutch multinational group that designs and sells ready-to-assemble

furniture, kitchen appliances and home accessories, among other useful
goods and occasionally home services. Founded in Sweden in 1943 by 17-
year-old Ingvar Kamprad, IKEA has been the world's largest furniture retailer
since 2008.
Adoption of AI :-
● To slash waste - The Swedish mega-retailer sells approximately $44.6
billion worth of its 12,000 products a year, and roughly one of every 10
of those items is returned—15% of which become waste. Given this
high turnover rate, Ikea’s approach to handling returned merchandise
without relegating it to the trash bin: artificial intelligence.It’s part of
Ikea’s larger push to reduce its carbon footprint. Once a product leaves
an Ikea store, the company doesn’t have much control over whether it
gets returned, passed on to some college kids, or ends up in a landfill.
So Ikea is trying to prevent waste in the first place. The company
installed an AI platform developed by the logistics software company
Optoro Inc. (of which Ikea is an investor) in 50 U.S. locations. So far it
only covers items returned from in-store purchases, but the software is
expected to accommodate online returns soon, too. It works by
predicting the best possible destination for returned merchandise,
whether that be back on the floor, up on the website, donated to charity,
or sold to a third-party wholesaler. The algorithm determines this based
on what makes most sense for Ikea’s profits.The software depends little
on human Ikea employees, except for in the early stages of processing.
Sales associates are expected to enter identifying information about the
returned item (likely a SKU number) along with its condition when it’s
returned. This tells the Optoro system (which uses previous
transactions and other data) what it needs to determine the product’s
fate. By working with Optoro they are using the system to help minimize
any waste from their products or their return flow. This will help them
achieve 100% circularity and zero waste. The AI system also provides a
road map for all the places where product parts can end up before they
go to waste.

● IKEA Place app - IKEA Place app uses Artificial Intelligence to offer
users curated and personalised home furnishing advice. It allows
customers to virtually place true-to-scale models of IKEA furniture in
their own homes by combining Artificial Intelligence and Augmented
Reality. people can place furniture, they can get smart home furnishing
tips and recommendations based on curation, context and behaviour.

To make the app more inspiring and easy-to-use, IKEA Place app
comes with interior design ideas to inspire, solve furnishing challenges
and just make people smile. The app lets the customer define areas
they want to furnish and provides unique and relevant suggestions
based on their preferences and IKEA home furnishing knowledge.
Customers can furnish a whole space with just a few taps. They can
 also point their camera at any piece of furniture, anywhere, and find the
most similar IKEA product instantly.

4.6 Sephora

Sephora is a visionary beauty-retail concept founded in France by Dominique

Mandonnaud in 1970. Sephora's unique, open-sell environment features an
ever-increasing amount of classic and emerging brands across a broad range
of product categories including skincare, makeup, fragrance, body and hair
care, in addition to Sephora's own private label.Today, Sephora is not only the
leading chain of perfume and cosmetics stores in France, but also a powerful
beauty presence in countries around the world.Owned by LVMH, the world's
leading luxury goods group, Sephora is highly regarded as a beauty trailblazer
because of its unparalleled assortment of prestige products, unbiased service
from experts, interactive shopping environment, disruptive spirit and constant
innovation.Sephora operates approximately 1,900 stores in 29 countries
worldwide, with an expanding base of over 200 stores across the Asia Pacific
region including Australia, China, Singapore, Malaysia, Thailand, Indonesia &
India.
Adoption of AI-
● Virtual trial - The enhanced Sephora Virtual Artist Lip & Lash Try On
enables shoppers to try on more than 90 false lash styles by brand and
style.Users can instantly see how each item looks on their own face and
can mix and match lash styles and lip colors.

● Live tutorials - Live tutorials are a new way to teach shoppers

application techniques and trends. Users can upload a photo, pick a
tutorial, such as Nighttime Smokey Eye or Essential Eyeliner, and see
step-by-step instructions using a digital interactive overlay to depict
where makeup should be applied on their own face and the final
result.Each tutorial offers a Split Screen view that slides back and forth
to see the before and after, tappable Pro tips at the bottom of the
screen and a pop-up list to shop the look.Sephora Virtual Artist uses a
smartphone’s camera to map the location and shape of facial features
using technology developed by ModiFace.Looks can be captured with
photos and video and then shared with friends or emailed with product
links for future reference. Products can also be saved to a user’s My
Favorites list or instantly added to a shopping basket for purchase.

● Chatbot - Sephora has also launched Sephora Virtual Artist on

Messenger, a chatbot-powered version of the original Virtual Artist that
 allows users to send any lip shade, brand, color, or format to the bot for
immediate product recommendations. Shoppers can then instantly try a
recommended product on their uploaded photo or click through to
purchase it on Sephora’s mobile site without having to leave the
Messenger app experience.

5. Adoption of AI in India.
According to a report commissioned by Intel, 70 per cent of Indian
organisations will be deploying AI-enabled solutions by 2020.

5.1 Flipkart
Flipkart Private Limited is an Indian e-commerce company established in
2007. It started with a primary focus on online book sales and soon, expanded
to lifestyle products, electronics, home essentials and groceries. Today,
Flipkart is the biggest online Indian marketplace competing with the world
leader Amazon.Since 2010, the company has made a number of acquisitions
including Letsbuy, Myntra, Jabong, eBay India, etc. Leveraging artificial
intelligence to analyse petabytes of data can unveil profound insights on
consumer tastes and preferences – a strategy which has played a crucial role
in Flipkart’s growth since 2007. Flipkart leverages these insights to improve its
online shopping experience, including which product it offers as well as where
it should focus its innovation efforts. In October 2018, its mobile app hit 100
million downloads on the Google Play Store, the first of any e-commerce
player in India to do so. The firm has created at least 40 insights for each of its
over 100 million customers — from GPS locations and page scrolls, to
preferred brands and frequency of purchase — which has helped to dissect
customers’ buying psyche, boost brand awareness and detect fraudulent
buyers.Regular users generate about 10 to 15 terabytes of data.

Adoption of AI :
● Recommendation Engine :Flipkart uses artificial intelligence to create
personalised search recommendations for its users. Given that India’s
customer base is vastly diverse, the firm is applying image recognition
— a deep learning application — for suggestions, product discovery,
product grouping and catalogue search.
● Their AI use cases range from preventing transaction fraud, customer
support, logistics and warehousing, estimating product popularity,
image speech and text processing, intent modelling, conversational
search, personalisation, discovery, forecasting, pricing, address
understanding.
● Mira, Flipkart’s artificial intelligence-run virtual shopping assistant, which
has been on trial since its launch in 2017, learns from each customer
interaction to improve the brand experience for shoppers. Flipkart’s goal
for Mira is to meet prospective buyers’ queries, derive intelligent
predictions and customisations, and tailoring enhanced online
experience resulting in reduced returns. Now, “our users with broad
intent (searching for, say, shoes or bedsheets) are guided with relevant
questions, conversational filters, shopping ideas, offers and trending
collections”, Like in offline shopping where the sales executive. asks a
customer about her size and other requirements before making a
suggestion, Flipkart is trying to get AI to do something similar. The
virtual assistant has already contributed to an improvement in buyer
experience, increasing cart addition by nearly 12%
● Through Myntra’s AI Platform called Rapid,they have been able to
figure out what has been selling and likewise reduced the trend to rack
time.
● In another initiative named Flipkart Utkarsh (which means ‘excellence’),
the e-commerce firm recently harnessed artificial intelligence to improve
on the quality of products sold by its 100,000 registered sellers and to
derive insights from the data collected from buyers and sellers, which
are then used to create guidelines to improve quality and reduce
returns.
5.2 Nykaa

Nykaa is a Mumbai-based multi-brand beauty retailer selling cosmetic and

wellness products. Founded by Falguni Nayar, Nykaa began as an online
retailer in April 2012 and opened its first physical retail in November 2015.
Adoption of AI :

● Verloop Chatbots
○ It uses machine learning (ML) to enable round-the-clock customer
engagement, while also allowing human representatives to jump
in whenever required.
○ It’s natural language processing (NLP) and natural language
understanding (NLU) layers are built using advanced language
models, which result in 94.56 percent accuracy. It has a three
layer processing-
■ Pre-processing (uses application like; Soundex phonetic,
Spell Checker)
■ Language processing
■ Language understanding
○ The platform’s messaging layer can handle 100,000 concurrent
connections, allowing our clients to grow ambitiously without
worrying about scalability of their conversational interface.
○ Verloop supports 11 regional and international languages,
besides English.
● Vin eRetail Suite - In order to grow across channels, Nykaa required
an end-to-end solution to seamlessly manage their offline & online
operations. Nykaa started using Vin eRetail Suite (Vinculum’s flagship
SaaS-based product) for online order, inventory and returns
management. It is a SaaS-based order fulfillment & inventory
management suite enabling multi-channel retailing. It has the following
modules:
○ Warehouse & inventory management system that enables 3PLs,
eTailers, marketplaces & retailers to undertake eCommerce
fulfillment efficiently
○ Order & returns management system that empowers sellers on
marketplaces to simplify order processing, logistics management
and returns management
○ Automated catalog listing that helps brands to create, automate &
manage product catalogs across multiple global marketplaces.

5.3 Van Heusen

Van Heusen is India's No. 1 premium lifestyle brand for professionals. With a
rich heritage of 128 years in the United States of America, the brand entered
India in 1990. Over a period of its 25 years of history in India, Van Heusen has
emerged as a fashion authority for the ever evolving Indian professionals
becoming the go-to source for the latest in fashion trends as well as for expert
advice on what to wear, when to wear it and how to wear it. Today, Van
Heusen is not only the most preferred work wear brand, but also effortlessly
straddles an entire spectrum of occasions like casuals, ceremonial and party
wear. Van Heusen Style Studio is the first digital store to be launched in India
in 2015. It features a no. of AI enabled technologies :

● My Fit Station : It is a is a special body scanning booth that scans the

customer's form and records it in a software that uses it to give accurate
size directions for personalizing the offerings in the store with precise
alterations

● The trial room, also referred to as 'Style Simulators' has a control pad
that helps the customer see themselves in multiple settings of lighting
and music for different occasions.

● Virtual mirror which helps virtual trials of the VH collections with

suggestive coordinated style recommendations. consumers can check
unlimited ensembles that would look good on them without even getting
into the trial room

5.4 Lenskart

Established in 2010, Lenskart.com is an online retailer of Contact Lenses,

eyewear and sunglasses. Founded under Valyoo Technologies by Peyush
Bansal who is digital marketing solution provider, it offers a selection of
prescribed eyewear and other accessories by the world’s leading
manufacturers like Fastrack, Sprint, Vintage, Johnson & Johnson, Ciba Vision,
Bausch & Lomb, Cooper Vision and many more. Lenskart has over 500 stores
in 70 cities in India and promises an average of 72-hour free home delivery
time, it delivers in 450 cities in India. It uses technology and artificial
intelligence (AI) in its operations to interact with consumers on its app and in
stores.
● Virtual Mirror is LensKart.com’s next step into making shopping online
for Prescription as well as Fashion Eyewear even more simpler. The
users’ need to select the product, click on the tab “TRY IT ONLINE”,
where they can both select a model’s face to try on their choice or
simply upload their own snap and get styling. The site does not provide
 any limit to the number of tries or to the range of products to choose
from. The Virtual Mirror is custom made for LensKart subscribers to
have the most fulfilling and free shopping experience. The services are
fast and efficient and the payment made by the user is securely
processed by the CCAvenue Gateway. At Lenskart they are using the
Viola Jones method to detect eyes and other parts of the face. It offers
only three profile views, sides & upfront.
● Chatbots - Lenskart uses technology and artificial intelligence (AI) in its
operations to interact with consumers on its app and website. It allows
your customers to easily interact with the brand through simulated
conversations. To provide around the clock assistance and use it to
improve their customer’s experience, to generate more sales and build
a deeper rapport with customers.

5.5 Pepperfry

Pepperfry is a leading online home and lifestyle store, offering a wide range of
furniture and home decor products. It was founded in 2011 by two friends,
Ambareesh Murty and Ashish Shah. Pepperfry is headquartered in Mumbai
and has offices, studio stores and warehouses in various cities in India such
as Delhi, Gurgaon, Chandigarh, Ghaziabad, Jodhpur, Lucknow, Kolkata,
Bhopal, Ahmedabad, Vadodara, Mumbai, Pune, Hyderabad, Goa, Bengaluru,
Kochi, and Chennai.
It offers more than 1.2 lakh products to choose from across various categories
such as furniture, decor, lamps & lighting, furnishings, kitchen, dining,
housekeeping, and hardware & electrical. Pepperfry has also launched its
furniture rentals service, which is available in top 8 cities in India.

● Virtual stores -To accentuate the experience with the brand, Pepperfry
provide virtual reality tours of their studios for its customers. Without
being physically present, the customers were able to understand the
essence of Pepperfry studios and how they operated. Finding a strong
foothold in the market as a result of these endeavors, Pepperfry is now
strengthening its logistics to establish more such virtual stores.

● Machine Learning -To determine the appropriate products for a

particular customer and the sequence in which these should be
displayed to them. They decode each Browse & Search session into
multiple attributes or factors; these could be product attributes, platform
attributes, customer attributes, temporal attributes, etc. They are then
used to determine both, the set of products to be displayed and the
order in which they should be displayed.Peppefry uses a similar ML
based approach to determine what are the characteristics of products
that are more successful than others and therefore what kind of
products should the Supply or Category teams be sourcing. ML is also
used to power recommendations that they display to users. For
example, if a user is on an item specific page, pepperfry is able to
display similar products to that user as well as products that are
frequently bought along with that particular product, so that they are
able to expand their users’ purchase basket. Finally, an application of
ML that pepperfry is enthusiastic about and is investing behind in, is
Visual Search. This will help customers get a set of similar products
based on a piece of furniture that they might come across offline. For
example, if I went to someone’s house and liked a particular sofa that
they have, Visual Search will help me identify the products on Pepperfry
that are most similar to the one that I liked offline.
6. Analysis & Discussion
Cost Benefit Analysis :

Most companies we know are not quite sure where to focus their AI
investments. As a result, they proceed cautiously, while a distinct minority
rushes forward.
● In 2016, the average annual AI investment among companies
surveyed in our trend report was $67 million, but the median
spend was only $3 million.
● Most companies (68%) were using AI to improve their IT
operations, especially with the aim of detecting and deterring
attempted intrusions into their computer networks and data
centers.
● Significantly smaller percentages of the companies surveyed
reported applying AI to their customer service (32%), sales
(29%), and marketing (29%) functions.
Looking to the future, 70% of the executives expect that by 2020, AI will have
the greatest competitive impact outside of IT in functions such as sales,
marketing, customer service, and HR.

Benefits :
1. Speed & Convenience
2. Cost Optimization
3. Real time visibility, Streamlining and Integration of Supply Chain
Process
4. Advanced Data Recording and Handling
5. Prediction of Failures, Customer Behaviours, Customer Needs and
Risks
6. Automation of Repetitive Tasks
7. Reduced Error
8. Data Analysis
9. Makes the model more sustainable
10. Personalisation & Focused Targeting- retailers are expected to
increase their investment in personalization by 18% over the next three
years. (BCG).

Cons :
 1. High Initial Costs
2. Technology Adoption requires training which is again a cost
3. Dearth of Professionals who can maintain and handle the AI Enabled
Solutions
4. Continuous Adoption of New Technologies

It is the need of the hour as indicated by following statistics :

Number of online shoppers will grow to 175 million by 2020, a 3.5x growth
over 2015
Digital spends will grow from 1.1 B$ to 4.5 B$ by 2021 – a 282% growth
70% of ecommerce transactions via mobile phones
Mobile video traffic is expected to grow 11.5 times during 2016-2021 at a
CAGR of 63%.
AI is key to integrating the different channels of interaction with the customer.
With the alarming number of people who are gaining access to these channels
speed and accuracy is a necessity without which the model will collapse.