The complexity of retail operations and shopper expectations are increasing while retailers’ ability to execute is challenged by the limited availability and high cost of labor. Solving this new retail paradox by leveraging AI-powered computer vision was the focus of a recent webinar, “How Smart Stores Give Retailers a Big Competitive Advantage,” hosted by SymphonyAI Retail CPG. Below are the top takeaways from the event, which featured guest speakers Barbra Chase, global head of business development at ReTech Labs, a SymphonyAI company, and Chad Gonzalez, Director of Value Engineering with SymphonyAI Retail CPG.
There is good news for retailers faced with the paradox of doing more with less. Powerful technology solutions that leverage AI-powered computer vision increase in-store visibility in a way that wasn’t possible just a few years ago. This helps stores become smarter, and as retailers gain new data sources collectively known as Store Intelligence, they are seeing for the first time what is really happening on the sales floor from the shopper’s point of view.
This breakthrough development has major implications because retailers can identify problems they didn’t know existed. Armed with Store Intelligence, retailers are able to more precisely direct store associates to improve execution in areas that have the greatest impact on the customer experience to produce the biggest financial benefits.
In addition to this core value proposition of making stores smart by leveraging AI-powered computer vision. Other top takeaways from the webinar included:
- Store Intelligence is gathering momentum, delivering value, and providing a powerful source of competitive advantage. With estimated worldwide deployments in approximately 10,000 stores, retailers are capturing images of shelf conditions and identifying issues undetectable to the human eye. A good example is planogram compliance. A shelf may look full and appear to be priced correctly to the human eye, but AI-powered computer vision can detect whether that is truly the case and recommend corrective actions when it isn’t.
- Store Intelligence improves productivity, a key benefit at a time when labor is in short supply and increasingly expensive. Because AI-powered computer vision can quickly identify execution issues such as non-compliant planograms, mispriced items, and out-of-stocks, prioritized work lists can be created so labor is deployed against the highest value tasks.
- In-store image capture gives retailers an opportunity to monetize data that is valuable to CPGs so that it can be leveraged in a mutually beneficial way. Retailers derive value from Store Intelligence in multiple ways, but so do trading partners who gain value from knowing that planograms they worked hard to develop were properly executed, they have the correct share of shelf, new items were cut in properly, and promotional pricing is correct.
- Phantom inventory can be fixed by gaining visibility of on-shelf availability to reconcile with backroom inventories and point-of-sale transaction data. The phantom inventory issue and OSA have become major pain points for retailers due to increased shrink challenges.
- The optimal method of image capture is via a mobile device, but hybrid approaches also work depending on the retailer and category. Mobile device image capture can be augmented with shelf and ceiling-mounted cameras or cameras on robotic devices.
- Optical character recognition (OCR) is key. It’s what gives Store Intelligence solutions the ability to read price labels and packaging information to unlock some of the most compelling use cases.
- Value is delivered in multiple ways beyond operational improvements. For example, Store Intelligence solutions are generally SaaS-based and come with robust service level agreements (SLAs) and access to subject matter experts which helps unburden a retailer’s IT staff.
- Getting started is simple and results are fast. Pilot programs are a great way to make a value determination. Retailers typically begin with two or three locations whereas a CPG may choose 10-20 locations, and then determine the frequency of image capture via mobile device by store and category. In as little as three months, a pilot can be running and producing data to highlight performance improvement opportunities and quantify the financial impact.
Scalability is a key consideration. Retailers who conduct Store Intelligence pilots often see such promising results that a decision to roll out may be made before the pilot period is over. It is important to work with solution provider partners who can handle large-scale, rapid rollouts.
The impact can be impressive. Results from an anonymous case study involving a retailer with sales of more than $1 billion were shared during the webinar. The retailer had a 25% gross margin, with 85% on-shelf availability, 80% planogram compliance, and 93% price accuracy. By implementing a Store Intelligence solution the retailer lifted revenue by $18.5 million due to a shortage reduction, increased planogram compliance and on-shelf availability, and improved pricing accuracy. The bottom line for the retailer was a $5 million profit improvement.
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Watch the recording or access the transcript of the webinar “How Smart Stores Give Retailers a BIG Competitive Advantage.”