Artificial Intelligence

& its Applications in

Retail

Group 3
•Apoorva Anand 2020SMN6729
•Subhanita Mukherjee 2020SMN6735
•Tushar Sharma 2020SMN6749
•Yogesh Sood 2020SMN6740
CONTENT
WHY
AI?
AI- EVOLUTION
 AI BENEFITS IN RETAIL
Predictive analytics enhance decisions related to SCM, customer behavior, resources allocation and the
likelihood of goods being damaged, lost or returned.

P&G created a skin

advisor service for its
Olay brand by screening
millions of selfies.
Provides personalised
. product recommendation
TRENDS IN THE FIELD
OF AI
Impact of AI in transforming businesses amidst
Covid-19 pandemic
B2C retail industry has revolutionized the shopping
experience for their customer through usage of AR+
AI applications such as virtual try on online retail
store.

Businesses all around are trying to gain insights to

make informed decisions regarding incorporating
these technologies in their businesses. 
E-commerce Amazon
AI use cases
• Amazons AI implementation in e-commerce has
been pervasive in its operations.
Combination of Voice and Visual based search
AI
• Alexa’s latest feature Show and Tell for blind.
• Helps the blind to identify grocery items as they
hold each item to the Echo Show camera and
ask, “Alexa, what am I holding?”.
• Alexa identifies the item through machine
learning and advanced computer vision
technologies designed for object recognition.
Fashion E-commerce Retail
• Style Snap – AI-powered fashion discovery
• Style Snap is designed to support fashion-focused
customers.

• Style Snap considers a variety of factors such as brand,

price range, and customer reviews.
Retail Logistics in Amazon-
AI enables making optimization decisions in
real-time with constantly changing information.

• AI optimization in the fulfilment centre

• Generally, there are 1 - 4 million bins per fulfilment
centre (warehouse) and on the order of 10 million
items.

• In every fulfilment centre, computer vision

technology analyses images captured by Cameras to
help Amazon staff keep track of everything.

• Artificial Intelligence decides which orders to pick at

the instant to get them in the same box within
minimum time on basis of optimization.

• Minimizes the distance the transport pods must

travel through this way.
 • Technologically advanced concept
grocery store which offers hassle
free checkouts for customers.
• This technology is referred as “Just
Use case - Walk out Technology”
• No requirement of cashiers in the
AMAZON GO store and customers need not wait
in queues to get out of store
• Similar technology as used in self-
driving cars
 • A combination of sensor fusion(IoT), computer vision (Artificial
Intelligence) and deep learning to achieve
• tracking of customers,
• their movement and
• what customers pick up and what does not appeal to them.
• Big Data and Analytics: Repository of 20 years of online customer
buying behaviour patterns.

Background • Applied predictive and prescriptive analytics in this concept

store (Cross- selling related products)

Process and • Internet of things: Cameras, weight sensors, infrared sensors

provide data on a continuous basis to the self - learning
algorithms trained on retail data set of Amazon.
Leveraging • Artificial intelligence and Computer Vision (Image Recognition)

AI •
•
The incorporation of AI may provide opportunity for
Data driven product display:
• Assortment renewal: Leads to inventory optimization.
• Personalization of services and offerings:
• Predict the personal choices of customers based on their
shopping history.
• Guide/remind them for buying their preferred products
 Amazon Go intends to revolutionize retail by creating a frictionless shopping experience

What is Amazon Go Just Walk Out Shopping Experience

Open to the public in 1,800 sq. ft. “In-

Beta located in Seattle early 2017 Choose and take
and-out” products you want

Ready-to-eat Data collection and

Requires as few as six Open Amazon Go App Walk out of stores
breakfast, lunch, monitoring to improve
employees per store and enter the store without any checkout
dinner, and snack experience lines
options

Revolutionary Technology Amazon Go’s Purpose

Maintain shopping
Computer Sensor Deep Disrupt the retail experience
vision fusion learning industry with
technology Preference to shop in
person

A patent filed in 2014 – expires in 2034

Opportunity to
Radio Frequency Identification (RFID)
Enhance consumer data grow payment
business
Cost of implementation not revealed so far

Amazon Go may bring a radical transformation to the entire retail industry due to its high efficiency and low demand for labor, therefore decreasing company
costs and increasing revenue.

5
Walmart is the world’s largest retail corporation with a focus on affordable prices and strong B&M presence

Company Overview Segmentation

Supercenters
Revenue $487.9 B •616,000 sq. ft.; 24 hr./day
Walmart serves 260 million customers a
•3465 (76% of U.S. locations)
week through its 2.3 million employees Market Cap $221.59 B
Profit $124.62 B Discount Stores
•46,000 sq. ft.; 15 hr./day; no groceries; conversions
•442 (10%)

Walmart Dominates the Grocery Market Neighborhood Markets

•27,000 sq. ft. (express: 15,000 sq. ft.); smaller selection
•667 (14%)
Sales by Department Grocery Market
Share
24% 17% Moving Forward

9%
9% 56%
63%
6% @IRL and AI
5%
11% implementation
Groceries Walmart
Kroger
Health & Wellness
Albertsons
Entertainment
Costco
All others All others

9
 Use case – Walmart IRL(Integrated Retails Labs) – AI Physical Lab

• Walmart introduced technologically advanced concept of AI in physical explorations

where they want to mix Real store experience with AI
• Integrated Retail Labs is set up to gather information about what’s happening inside the
store through an impressive array of sensors, cameras and processors.
•  Team use real-time information to explore efficiencies that allows associates to know
more precisely when to restock products, so items are available on shelves.
•  Combination of cameras and real-time analytics automatically trigger out-of-stock
notifications to internal apps that alert associates when to re-stock.
• Store includes multiple information stations for customers to visit to understand exactly
how AI makes the store tick.
• A Welcome Center at the front end allows customers to dive deeper into technical
specifications and common questions
 Shopping Process for a customer in IRL Store- Use cases

Use case 1
• Customer walk-ins to the IRL store and arrives at a particular shelf in store and picks the
item (Pack of bottles).
• AI Defect's the product on the shelf on movement.
• Recognize the specific product (meaning, the differences between 1 bottle or 2 bottles)
• Compare the quantities on the shelf to the upcoming sales demand.
Use case 2
• Customer walk-ins to the IRL store and arrives at a particular shelf in store and picks the
item.
• AI Defect's the customer movement and alerts that he is moving towards Registers.
• Ensures that Register is open/working for point of sale.
Use case 3
• Customer walk-ins to the IRL store and arrives at a Cart pick up.
• AI Defect's the customer walk-in to store and alerts associate and ensures that Cart
availability is there for customer

Customers can trust that the products/Carts/Register’s are there and will be available during the times they shop
AI for Wal-Mart E-commerce Search- Use case

Navigation

Auto-complete Spell Correction

Black and Decker Coffee Maker Under $50

Brand Type Price

Text
Matchi
Visual Search Query Understanding Relevance
ngRanking
& 17
Query Understanding with the help of AI in Ecommerce
lemon

Without Query Once we understand the query “lemon” as

Understanding fruit
 AI Benefits for Walmart /Amazon/Ikea

Walmart Amazon

• Reduction in operating expenses

7%
• Increase order accuracy
20%
•Reduction in time used to process • Cost savings per fulfillment center

25 inventory $22.5 MM
% •Reduction in inventory processing
expenses 75%
• Reduction in inventory cycle length

25 • Increase in capacity value

50%
• Increased available storage space

% • Amazon quarterly R&D expense

Technological Benefits $4.45 B
29 Increased Processing
% sorting
• Warehouse Efficiency
& retrieving technology
• Inventory cycle & storage
• Enhanced data integrity

Reduced Labor Costs

• Wages, benefits, turnover & training, etc.

Impact on Consumers
• Fewer delays due to errors
• Store-front technology
Walmart Vs Amazon Vs iKea- Comparison Slide

Walmart Amazon Go iKea

Everyday Low Convenience Convenience
Prices
Extensive Proximity
Proximity
assortment
Holistic Quality Quality
experience assortment assortment

Unconventional Risk and Devil’s Advocate

• Technology not yet available

• Development is a trial-and-error process
• Amazon is already experiencing issues in their beta store
• Impatient investors
• Have historically been less forgiving for failed investments
or delayed returns

13
IKEA - “ASK ANNA”
 • Mobile app allows customers to see what the furniture will look like and fit in a
certain space.
Ikea Place • User Just have to upload the photo in the app, IKEA AR can measure the size of the
room and allows you to drop a piece of furniture in this image from the IKEA
catalog.
• Apart from the furniture, the User can get building ideas and tips to make people
smile.
 • As the business grows, Ikea's
warehouse is also flooded with
sales returns. This has been a
problem for the management of
this restored furniture.

Ikea Manage • AI solution is provided with an

Product algorithm that determines the
action required according to what
Recovery makes a profit to Ikea.

Through AI • AI decides whether the returned

stock should be sold to third-party
retailers, whether it can be
donated or returned to new stock
after processing.
IKEA – FUTURE
FURNITURE
WITH AI

• Be prepared for a weird future when your bed speaks to you whenever you put your ass in it -
graciously someone other than your ready-to-assemble furniture

• The Danish company Space10 is currently testing people with what they would like to see in a
virtual assistant
• System continuously monitors/analyse the video/ images provided by the cameras for building a
model for posture and position of each person in the store.
• The data from camera and sensors from the shelves provide data to the deep learning algorithms to
form a comprehensive understanding of every individual and product in the store and deciding
whether the customer has picked up something from the shelf.
• The computer vision technology identifies the product and individuals in the store.
• The incorporation of AI may provide opportunity for
• Data driven product display: The AI models can predict the set of preferred products by customers
and Amazon can keep those products at display.
• Assortment renewal: The system is able to generate the information of availability of the product in
the store shelves and its timely renewal. This leads to inventory optimization.
• Personalization of services and offerings: AI based system can predict the personal choices of
customers based on their shopping history and guide/remind them for buying the products.
 • Privacy concerns of customers.
• Issues of detection of thefts.
• It was reported that the technology could handle
only 20 people in the store at a time.
• How many SKUs can be handled by this concept
store

Concerns • Evaluation whether the cost of implementing,

maintaining, and sustaining the automatic system
would be able to offset or exceed the cost-savings
achieved through reduction of checkout clerks.
• Amazon might be looking at increased
turnover(Higher sales per square metre) at the store
as customers would be inclined to buy from such
stores due to convenience and ease of purchase.
How AI is revolutionizing the retail
industry:
AI is enabling retail systems to work together to optimize customer experiences,
forecasting, inventory management.

In the physical retail space AI is making its impact through Augmented reality. Huge
number of companies have come on board to provide AR support to shopper
experiences in a various industries such as fashion and automotive.

As of 2018, estimated size of augmented reality in the Retail industry  has been
around 1.55 billion dollars USD.
Thank you