How to Leverage Artificial Intelligence in Retail

Posted: 2024-04-25
Written by: Michał Mroczkiewicz

In today’s market, consumers entering any store possess more information than ever before. Purchase decisions are often preceded by thorough market research, including brand comparisons and review assessments. However, final choices are still made on the store shelf, which has become a critical battleground for brands.

Product Display in Retail

The visibility of products in-store, supported by effective merchandising strategies, plays a pivotal role in the purchasing process. The impact of shelf display serves as a critical indicator for brands during the First Moment of Truth. This is especially significant in the context of pharmacy and drugstore chains, whether operating under own brand or franchise models, where proper visibility of available inventory is even more crucial.

Evolution of Sales Through AI

Currently, artificial intelligence and machine learning are driving and supporting the collection of vast amounts of data at every customer touchpoint, leading to the automation of retail operations. Research over the past several years has repeatedly shown that in the FMCG sector, approximately 70% of purchase decisions are made after the customer enters the store, highlighting the importance of impulse buys for physical retail locations. AI-based solutions like Shelf Inspection AI are transforming inventory management in stores by enabling real-time monitoring and control of shelf displays. Utilizing a smartphone equipped with the SIAI app simplifies this process, making it faster and more efficient.

How does Shelf Inspection AI work?

The process of implementing Shelf Inspection AI can be divided into several key steps that together form a comprehensive and efficient solution for retail chains.

1. Snap, Snap, and Snap Again

In the initial step, sales representatives or store employees use the Shelf Inspection AI mobile app to take a series of photos of the store shelves. These images must cover the entire product display, which is facilitated by an intuitive on-screen guide that leads the user step-by-step through the photography process.

2. Now, Let the Magic Happen!

The uploaded images are processed by servers, where specialized AI algorithms and machine learning techniques analyze them and merge them into a cohesive panorama of the display. This process provides a complete and accurate view of the product presentations on the shelf.

3. Identification

After the panorama is created, AI-supported image recognition technology proceeds to a detailed analysis of each photo segment. At this stage, algorithms identify individual products, their positioning, and availability, while also classifying them at the SKU level. These algorithms are capable of recognizing even subtle differences between products, which is crucial for the accuracy of the analysis.

4. Analysis and conclusions

The concluding phase involves analyzing the gathered data and generating detailed business reports. These reports, the result of advanced Business Intelligence, offer a comprehensive set of insights, ranging from the overall status of the display to identifying stock deficiencies and providing specific recommendations for product placement optimization. All this information is delivered in an accessible and ready-to-implement format, enabling swift corrective and optimization actions.

AI implementation in retail

Faced with ever-increasing customer expectations and competition in the retail market, leveraging modern technology becomes essential to compete with online sales. According to Gartner, 91% of retail IT leaders consider artificial intelligence the most crucial technology to be implemented by 2026. It is in this context that Shelf Inspection AI emerges, revolutionizing product display management and opening new avenues in e-commerce. Utilizing AI and Image Recognition (IR) technology accelerates and automates store audit processes, bringing a host of benefits, including significant automation that streamlines operations and enhances store management efficiency.

Enhanced Product Availability on Shelves

One of the greatest challenges for retail chains is maintaining optimal shelf stock levels. Product shortages can lead to customer dissatisfaction and lost sales. Through the automation provided by Shelf Inspection AI, continuous monitoring of shelf conditions is possible, ensuring a prompt response to any shortages. This directly translates to increased sales, as customers consistently find the products they are looking for.

Elevating Customer Shopping Experiences

A key element of success in the retail industry is providing customers with positive shopping experiences. Well-stocked shelves featuring easily-accessible and well-displayed products make shopping simpler and more enjoyable. Shelf Inspection AI addresses customer frustrations related to hard-to-find products, significantly boosting their satisfaction and loyalty to the brand.

Risk Diversification

Improperly managed shelves can lead to significant financial losses, both from stock shortages as well as inefficient product displays. By automating the process with Shelf Inspection AI technology, these risks are minimized. It identifies issues in real-time, enabling prompt correction. This allows retailers to significantly reduce losses due to out-of-stock situations and suboptimal product placements.

Time Savings and Reduced Frustration

Manual shelf auditing is time-consuming and prone to errors. Implementing Shelf Inspection AI significantly simplifies this process by automating tasks and eliminating the need for continuous manual checks by staff. This not only saves time but also reduces frustration associated with repetitive and tedious duties, allowing employees to concentrate on higher-value activities.

Error reduction

Manual monitoring and management of shelves are susceptible to human error. Shelf Inspection AI leverages advanced artificial intelligence algorithms to conduct precise analyses of shelf conditions, eliminating the risk of errors and ensuring high accuracy in product display management.

Access to Detailed Reports and Analytics

At the end of the process, users receive detailed business reports tailored to their individual needs. These reports provide specific guidelines and recommendations that can be immediately applied to optimize display and inventory management. They offer valuable insights into customer behaviors and product placement efficiency, which are invaluable for making strategic business decisions.

Summing it up

Shelf Inspection AI: More than just a vision for the future, this solution is here now, poised to instantly elevate the success of retail networks. Offering benefits at multiple levels—from boosting sales to enhancing customer satisfaction and operational efficiency—it becomes an essential tool in the arsenal of a modern retail chain.

We invite you to reach out to us for a pilot implementation of this innovative technology in your operations, to experience the advantages of automation and intelligent shelf management, opening up new possibilities in e-commerce.

Written by: Michał Mroczkiewicz,
Tech Solutions Advisor

With over a decade’s experience in modern business development, he is focused on innovation and committed to breaking free from outdated modes of thinking. Avid AI enthusiast, passionate about bringing real value by joining the dots between clients’ business needs and technology. When not working, he loves spending time with his family, playing with kids, and reading books.

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