In a recent report by Retail Week, titled “Beyond the Hype: How AI in UK Retail Has Moved to the Mainstream,” the spotlight is on the transformative role of artificial intelligence (AI) in the retail industry.
Ocado Group: Revolutionizing the Supply Chain with AI
Ocado Group, a fusion of tech giant Ocado Solutions and the grocery retail arm Ocado Retail has become a trailblazer in AI integration throughout its value chain. By weaving AI into their operations, Ocado has improved operational efficiencies and elevated customer engagement to new heights.
Customer personalization: At the forefront of their AI deployment is personalization. For Ocado customers, the AI seamlessly integrates into their shopping journeys. Items frequently purchased or marked as favorites are given priority in search results, and reminders are sent for regularly purchased items such as milk and other essentials. This creates a frictionless and engaging shopping experience, driving customer loyalty.
Waste reduction: Beyond the customer interface, Ocado employs AI for predictive forecasting. This enables the retailer to consistently maintain stock levels, boasting waste levels as much as 50% lower than industry standards. Accurate predictions lead to higher product availability and fewer substitutions for customers.
Supply chain efficiency: Ocado’s streamlined supply chain, unburdened by a network of physical stores, allows for a broader product selection than its multichannel competitors. Moreover, the company has committed substantial investments to AI-driven robotic picking solutions and autonomous deliveries, further bolstering its supply chain operations.
Charlotte Tilbury: elevating customer experiences with AI
The beauty industry is no stranger to tech advancements, and Charlotte Tilbury has leaped forward by introducing AI-powered tools to enhance customer engagement. In June 2023, the brand launched a mobile app that leverages AI and deep learning for a unique shopping experience.
Personalized beauty solutions: Charlotte Tilbury’s app offers an array of AI-driven tools aimed at helping customers select products that they traditionally test in physical stores. By answering three questions and uploading a selfie, customers can use the Pro Skin Analysis tool, which provides a personalized skincare routine and expert advice in under a minute. The Pro Shade Match tool uses an AI-driven “expert skin algorithm” to simplify and improve online shade matching.
Virtual store with a twist: In addition to its app, Charlotte Tilbury’s virtual store gained a remarkable feature in April 2022—an interactive 3D volumetric avatar of the brand’s founder, Charlotte Tilbury herself. This innovative approach to mixed-reality technology offers customers a unique and engaging shopping experience, keeping them on the site for longer periods.
Shein: AI-powered agility in fashion
Shein, a fashion pure player, is tapping into the power of AI to stay ahead in the fast-paced world of fashion retail. With millions of followers on social media platforms, Shein harnesses AI for social listening and real-time demand analysis.
Reacting to trends: Shein utilizes an AI engine to detect real-time consumer demand and interest shifts. This AI-driven approach enables the company’s supply chain to respond swiftly to emerging trends, ensuring that on-trend styles reach the market promptly.
Data-driven product development: An iterative process that combines AI analysis with human insights powers Shein’s product development. Data from web searches and social mentions is analyzed and shared with the brand’s designers, facilitating agile and informed decisions.
Reducing inventory waste: Shein employs a test-and-reorder model to mitigate inventory waste. This involves ordering small batches of items per style to assess performance before committing to full-scale production. As a result, Shein claims that its unsold inventory level is now less than 10%, a significant improvement compared to the industry average of 25% to 40%.
The examples of Ocado Group, Charlotte Tilbury, and Shein illustrate how AI has transcended hype and become an invaluable tool for retailers in pursuing ROI. AI is at the heart of their strategies, from supply chain optimization to personalized customer experiences and trend-driven product development. As the retail landscape continues to evolve, it is evident that AI will remain a cornerstone of success for those willing to embrace its transformative potential.
