Search for the term “the future of retailing” and you’ll see plenty of stories about physical retailers being marginalized by their dot-com counterparts. Some would say that physical stores are fading from the retail landscape. Quaint, but doomed. To understand why consider the shopping experiences offered by each channel.
Online vs. Offline
For example, while checking the number of followers in their Instagram account, your future customer sees an image of their favorite celeb wearing shoes that they simply must have. Other distractions intervene, but after seeing several banner ads they finally click, swipe or tap their way to an online store. Thanks to cookies and ad tracking, the site already knows a great deal about the customer, from their purchase history down to their shoe size. The customer browses for products, reads reviews and compares items. With each click, the store knows a little bit more.
As the customer moves through the site, the convenience, selection and price advantage of shopping online becomes obvious. When they make a purchase, the customer can be rewarded for their loyalty with a coupon code, and the inventory system knows which item to reorder.
On the other hand, a retail store doesn’t know who you are the moment you walk in the door. They don’t know if you’ve bought from them – or from any of their competitors – before. They have no idea what color you like, or what shoe size you wear. Traditional retailers rely heavily on in-store displays or staff to guide customers through the store.
Now replay that scenario – but with one difference. This time it’s a physical store equipped with the latest generation in AI. Small cameras placed throughout the store use computer vision to provide an advanced level of retail analytics, possibly even better than what is available to online stores, while also creating a better experience for shoppers.
The Customer Journey in an AI-enabled Store
In this new scenario, a face recognition algorithm identifies customers and their demographics as they walk through the front door. Maybe this individual is a regular shopper and a member of your loyalty program. Based on their purchase history, you can send them a notification while they are in your store about new offerings that may be enticing to them.
As they move through the aisles, multiple cameras recognize that customer as the same person and track them throughout the store. Do the endcap displays attract their attention? Where do they stop and spend time? Does the location of a preferred product impact what else they buy nearby? Once your customers are at the check-out counter, payment can be as simple as a quick scan of their face.
On a larger scale, this data can be used to develop in-depth, real-time heatmaps without having to lift a finger. The information can also be bolstered with other AI capabilities such as emotion detection and action recognition in order to build highly detailed customer insights. Your customers and their paths through the store are now actionable data for your business, opening up a vast number of opportunities.
Security and Store Operations
The analytics you collect on the floor will impact your customers and their experiences, but there’s a slew of potential opportunities behind the scenes that can streamline operations for your business.
Surveillance and access control are important in-store functions for avoiding crime and unauthorized activity. Using Xnor’s AI capabilities, security can be enhanced with features like weapon or dangerous action detection. Secure areas can be better controlled with computer vision solutions like face recognition and person detection to make sure only the right people have access to restricted areas.
Another particularly valuable function is inventory management. Knowing when items are out of stock on the shelves helps to restock more efficiently. Creating efficient, real-time solutions for monitoring items also helps to keep vendors up-to-date on their products within your store as well as how they are performing. This can also be tied to traffic patterns so you can understand how often people are interacting with different products.
Gaining a competitive advantage
Many see the future of retail as being fully automated, but that shift won’t happen overnight. Retailers are beginning to introduce these capabilities piece by piece in order to stay ahead without having to completely overhaul operations. By incorporating AI solutions developed by Xnor, your store will avoid the headaches of conventional AI solutions. Xnor models can run on commodity devices, so you don’t need to upgrade your cameras or pay for expensive cloud-computing services (which are less secure). Running on-device also reduces latency and power consumption so your solutions will pick up that power-walker even on a battery-powered camera that you can place anywhere.
With Xnor’s computer vision models, physical stores can have the retail analytics they need to compete with their online counterparts – and help a loyal customer to find the perfect pair of shoes.
Visit Xnor to learn how the next generation in AI can help your retail store compete.