How AI is Transforming the Retail Industry

Retailers worldwide face a wide range of challenges, including high staff attrition rates, changing consumer habits, omnichannel shopping, reduced brand loyalty, and an exponential growth of siloed data. In an effort to overcome these challenges, the use of artificial intelligence (AI) is exploding in the retail sector. Retailers have come to realise that AI solutions are essential to helping them overcome common obstacles and move towards a more customer-focused and efficient future.

Microsoft has recently announced new generative AI and data solutions and capabilities that have the potential to transform the retail industry. While still in preview at the moment, the advancements promise to improve the entire shopper journey, empowering store employees, facilitating personalised shopping experiences, and unlocking data to help increase audience reach. A range of new retail-focused features and services aims to help retailers infuse copilot experiences throughout the shopper journey.

Copilot for Personalised Shopping Experiences

Problem: As consumers become increasingly used to having personalised interactions with brands, the quality of these interactions can significantly impact sales. However, while online shoppers expect to be able to use tools to discover products, receive recommendations, and make purchases seamlessly, the reality often falls short. This can lead to frustration, missed opportunities to connect, and ultimately, lost sales. Customers might have difficulty finding products they’re interested in, receive irrelevant recommendations, or have difficulty getting the support they need.

Solution: Microsoft Cloud for Retail now provides a copilot template that enables retailers to build personalised online shopping experiences. The prebuilt template uses the retailer’s existing systems and data and can be embedded into websites, apps and more to help shoppers find and purchase products more easily. Customers can simply ask what they’re looking for through natural language. The copilot template then uses contextual awareness to provide responses comparable to those of an in-store staff member. The responses are in natural language, too, with straightforward suggestions and recommendations to make product discovery as simple as possible.

Result: Generative AI has the potential to be a key differentiator, providing a unique concierge-like experience across the shopping journey, improving the customer experience and reducing time to value. Through the power of generative AI, shoppers can understand product options and use their time more efficiently.

AI Tools for Empowering Retail Employees

Problem: Employees are key to every business, which makes job satisfaction fundamental. Unfortunately, however, retail staff are leaving their jobs at an alarming rate, and the lack of access to digital tools is adding to the problem. Manual tasks such as stock checks, price changes and order processing are time-consuming and tedious, employees have limited opportunities to learn new skills and progress, and the workplace can feel outdated and unable to meet customer needs. While frontline retail staff are excited about the potential that digital tools offer the retail industry, many don’t feel they have the tools they need to be effective and productive in their roles.

Solution: Microsoft’s Cloud for Retail copilot template on Azure Open AI Service can help retailers build solutions to support in-store operations. The technology can be accessed on mobile devices, and users can use natural language to learn about stored procedures, products, HR policies, and more.

Result: With easily accessible product information and answers to frequently asked questions, employees are empowered to provide quality customer service. Meanwhile, managers can gain insights and save time with voice-enabled task creation and assignments and have insights to drive meaningful actions such as offering updated training or guidelines.

The Power of AI for Unifying Siloed Retail Data

Problem: The retail industry generates a considerable amount of data from various sources, including customer interactions, inventory management and operational data. However, while the industry has a vast pool of data about purchases, browsing history, loyalty programmes, and more, the data is often siloed. Legacy systems are expensive to integrate, different departments work in isolation, focusing on their own goals, and concerns about data privacy stand in the way of efficient data sharing. The issue is that this leads to retailers missing out on gaining valuable insights that can be used to improve their operations and, importantly, the customer experience. To gain actionable insights and leverage AI to its full potential, standardised data is required across various systems and applications.

Solution: Microsoft has unveiled new retail data solutions in its end-to-end analytics platform, Microsoft Fabric. The unified platform will bring together all the data tools and analytics retailers need to benefit from AI. Microsoft Fabric includes a data model for governance, reporting, business intelligence and advanced analytics, a data connector to integrate e-commerce data in realtime and analytics templates to deliver actionable data-driven recommendations.

Result: With Microsoft Fabric, the business can speed up the implementation of retail-specific data models and ensure that their data is all in one place. In doing so, they can transform siloed data into predictive insights to improve customer engagement and the shopping experience.

Generative AI for Driving Marketing Campaigns

Problem: Building effective marketing campaigns is a complex undertaking. Siloed applications can create a disjointed workflow, leading to inefficiencies; creating new campaigns often involves time-consuming manual tasks and creating personalised content at scale can be a considerable struggle. All of this can lead to campaign delays and inefficient workflows.

Solution: New Copilot features in Dynamics 365 Customer Insights can help marketers build end-to-end projects and campaigns. Marketing teams gain an AI-first experience and can start campaigns by simply stating their desired goal in natural language. Copilot immediately creates a project board, delivers recommended content and unifies the project. Typeface is also available to help produce on-brand images and assets.

Result: By using AI to automate processes, optimise workflows, and personalise content, Microsoft’s Copilot features in Dynamics 365 Customer Insights have the potential to vastly improve marketing campaign development. This would lead to quicker campaign launches, a more engaging customer experience, and more efficiency for marketing teams.

The Future of AI in the Retail Industry

AI offers the potential to personalise the shopper journey, recommend products, and streamline checkout experiences. Microsoft’s AI solutions are critical players in making this vision a reality. With Copilot’s pre-built templates for personalising the shopper experience and empowering retail employees, Microsoft Fabric’s end-to-end data platform, and more, Microsoft is giving retailers the tools they need to thrive. By harnessing the potential of AI, Microsoft is shaping a future of retail that is efficient and remarkably customer-centric.