Six AI applications for more sales success
In the battle for market share, all adjustments must be optimized, especially in retail: Prices, stock levels, shipping and customer approach. Artificial intelligence (AI) can provide targeted support thanks to real-time analysis and communication functions. The AI and industry experts at IT service provider and consulting firm Lufthansa Industry Solutions (LHIND) present six AI applications that retailers can use to significantly increase their competitiveness.
"Compared to other sectors, the retail industry is still not very automated. AI is a game changer for the industry, as the applications currently being developed can unleash enormous potential - for the benefit of customers and retailers. This is not a dream of the future, but is already mature, affordable and versatile. Companies that do not embrace these new tools will suffer competitive disadvantages in the future," says Marius Browarczyk, Business Manager Commerce & Consumer Goods at LHIND.
AI systems can take on many standard tasks, but can also be used for special challenges in customer or supplier communication. From the multitude of possible applications, the experts at LHIND have identified six that every retailer can already use quickly and easily today:
- Intelligent assistants - chatbots, OCR and NLP
Be it specific questions about ingredients, stock levels or discount promotions: Thanks to the direct connection to databases and the capabilities of natural language analysis and text processing, modern chatbots are able to handle complex tasks and provide well-founded answers. These capabilities are revolutionizing B2C, B2E and B2B communication. In addition, thanks to the combination of the two key technologies optical character recognition (OCR) and natural language processing (NLP), data can be reliably extracted from physical documents such as delivery bills or invoices, processed digitally and analyzed using data or process mining.
- Demand forecasting - auto-scheduling instead of mountains of waste
If there are too many goods in the warehouse, the available capital is being used incorrectly. If, on the other hand, stock levels are too low, sales move to the competition, which is usually just a click away. It is not without reason that inventory management is a real art in many companies, which can now be significantly improved by AI-supported "auto-scheduling". This involves analyzing trends in historical data as well as current influencing factors (days of the week, vacation periods, weather conditions, etc.). And this also benefits the environment: the improved demand forecasts reduce unnecessary mountains of waste, especially for perishable goods.
- Package optimization - 3D Tetris ensures full cartons
Thousands of parcels leave warehouses every day - often with a lot of air and little content. AI applications now help to arrange the individual goods optimally in a carton without wasting space. The exact right box size is also determined automatically. And after the 3D Tetris game, AI-supported route optimization takes over in combination with fully automated picking.
- Up- and cross-selling - anyone can do the smartphone/mobile phone case combo
Product placements according to the motto "Customers who have bought product A will certainly also find product B interesting..." are already established in retail. However, new AI applications not only find obvious combinations such as smartphones and phone cases, but also hidden correlations in a huge mountain of data. This makes product recommendations even more appropriate. The result: the shopping basket value increases in step with customer satisfaction.
- Dynamic pricing - the optimum price in real time
The principle that demand determines price is often ignored, particularly in the retail sector. Once prices have been set, they appear to be carved in stone, even though demand for DIY products increases on Saturday mornings, for example, while demand for baked goods decreases in the evening. With dynamic price adjustment, however, companies can take relevant internal and external influencing factors into account. AI takes over the data analysis and can thus calculate the optimum price based on all available information - dynamically and in real time.
- Cancellation forecast - identify customers willing to switch in good time
Winning back lost customers is more difficult than retaining existing customers. This is particularly true for subscription models. An AI service developed by Lufthansa Industry Solutions analyzes customer data to make predictions about churn intentions. Customers who are willing to switch can be proactively persuaded to stay with tailored offers or campaigns. In addition, a simulation environment can be used to evaluate how certain offer adjustments would affect the churn rate.
For industry expert Marius Browarczyk, who can draw on a team of more than 150 AI and data analytics experts at LHIND, the use of artificial intelligence in retail is no longer a question of if, but only of when and how: "Competition is getting tougher, and retailers need to act more efficiently, flexibly and quickly. This is not possible with manual processes. The future lies in comprehensive AI support to evaluate existing data and make it usable."
Source: www.lufthansa-industry-solutions.com
