New opportunities for retailers opened by AI and Machine Learning

New opportunities for retailers opened by AI and Machine Learning
24 May 2018

Retailers are actively using Machine Learning technologies, neural networks and Artificial Intelligence systems to improve the efficiency of operational decision making processes. How it works and differs from other IT products, and what opportunities are open now to retailers, Product Manager (Retail services) of oneFactor Evgeny Maximcha and other market experts are talking about.

The key difference between AI and any other IT products is the ability to learn from real examples to make effective decisions in any unfamiliar situation. This function allows retailers to automate the whole the decision-making process, and not just routine operations, as in the case with other IT systems.

For retail and FMCG, Artificial Intelligence is potentially capable of taking both strategic and operational decisions. Our company oneFactor has been working in this market for a long period and provides retailers with unique services based on Machine Learning algorithms. As to a strategic decision, we can give the case of opening retail stores in new locations. For example, based on the data about the existing stores AI algorithms can quickly identify the most important factors and dependencies that are not obvious to a human perception. After that AI algorithms may use the identified dependencies for analyzing new locations to predict possible turnover and to choose the optimal location for opening a new store. Actually, that process completely repeats the algorithm of human thinking: AI accumulates a certain experience and uses it to make a decision in a new situation.

A vivid example of the retailer's operational decision automation is the automated process of conducting promo-actions. As experienced sellers know that particular product "will not go" in this store, because it is not interesting for buyers, and the AI algorithm can analyze previous promotions and choose the optimal combination "store | product | discount %" to reach the company’s current goals: market share, margin or traffic growth.

The full version of the article can be found here.

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