Is AI the key to customer experience success for bricks and mortar retail?

Since the emergence of online shopping, traditional bricks and mortar retailers have been at a disadvantage with internet giants like Amazon. They haven’t been able to easily replicate the personalised product marketing for up-sell and cross-sell opportunities that customers experience online. But that may all be about to change because of AI, says Jens-Michael Pohl, Manager for Sales Engineering at Panasonic Connect Europe’s Business and Industry Solutions.

I quickly hopped onto Amazon the other day to buy some ink for my printer. I found the brand I needed, had the usual moment of shock at the price of printer ink and added it to my basket. At the bottom of the page, an offer caught my eye. There was also a good deal on A4 paper. I checked and I was running low, so I bought that too. It was an immediate cross-sell opportunity for the online retailer, and I was a satisfied customer that wasn’t about to run out of paper at an inconvenient moment.

That activity, that I’m sure many of you do every day, summed up the challenge that traditional bricks and mortar retailers have faced since online competition began. Through the wonders of cookies and data analytics, the cross-sell and up-sell opportunity for online retailers is immense and it’s been almost impossible to replicate in the high street, until now.

The e-commerce market in Europe is projected to grow by 9.31% from 2023 to 2027, resulting in a market volume of €902.30 billion in 2027. Shopping on the High Street, however, continues to fight against decline. Retailers are looking to technology to help them fight back and AI looks to be a major opportunity.

Real AI retail applications

The potential benefits of AI seem to have been talked about endlessly over the past 12 months, but real world applications are already benefitting retail and the addition of Generative AI with existing AI applications is about to revolutionise the customer retail experience in store.

Imagine a supermarket where I walk in on a hot sunny day. I’m looking forward to watching my favourite local football team in a big derby match on the tv later. Friends are joining me for a BBQ and I’m there to get supplies.

As I look around the store, I notice there are quite a few people, just like me, doing the same thing. As I turn into the aisle, I see a display pop-up a personalised advert for me. “Watching the game later with friends? How about a burger on the BBQ and ice-cold beers for everyone?” Followed by details of the special offer. Sounds futuristic but it’s possible today.

Cameras in the store are no longer just for security. Cameras with integrated AI can monitor the demographic information – never personal data – of people in the store.  The cameras identify the general profiles of people shopping, never personal data, so those with privacy concerns need not fear. This information can be combined with buying preferences and trends in the backend retail system along with additional information such as weather or local events. Then instantly personalised advertising can be displayed in the store.

It’s all possible today because of AI. AI in the cameras to collate profiles, AI in the backend system to match products and profiles and suggest offers in real-time and the Generative AI capabilities of Chat GPT4 to instantly create and deliver personalised advertising. Of course, we always recommend a human check for quality control on the communications before publishing but it is fundamentally an AI automated system.

Panasonic has partnered with leading data and AI specialists ADEAL Systems to bring this next level shopping experience to life. It combines their AI-powered personal shopping assistant CUSAAS (CUstomer Segmentation As-A-Service) with Panasonic state-of-the-art retail technology. CUSAAS has already been recognised as an important retail technology application for the industry. Initial development was supported with funding by the German Hessian Minister for Digital Strategy and Development (“Distr@l Förderprogramm des Landes Hessen”). In October 2023, CUSAAS was selected for support to scale globally by the German Accelerator Kickstart program, an international program supported by German Federal Ministry for Economic Affairs and Climate Actions.

This latest complete end-to-end solution is currently being demonstrated in our Customer Experience Centre (CXC) in Munich. It’s where all Panasonic’s B2B solutions are on show to see and try. Here Panasonic provides the AI Cameras and 4K Displays, and its retail consulting experience. ADEAL Systems provides the data analytics and CUSAAS AI-powered engine and FRAMR delivers the personalised advertising to the displays.

The system brings together a retailers existing Ecommerce, CRM, ERP and Data Warehousing data and combines it with other web-based services, such as weather, news and events feeds. This wealth of data can then be AI analysed using more than 50 marketing key performance indicators and recommendations made. Generative AI then produces personalised marketing and advertising using customised Large Language Models.

The bottom line is that if you are a retailer looking to bring more personalised shopping experiences to your store, the demonstration solution at Panasonic’s CXC is now there to assist in creating pilot projects. And if you’re a shopper, look out for those AI-powered personalised ads talking to you on your future store visits. Hopefully it should ensure that you never again forget to pick up something at the store!

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