The adoption of artificial intelligence (AI) is rapidly increasing around the globe. In fact, AI could add an estimated $15 trillion to the global economy within the next decade. Yet many organizations have been resistant to begin integrating AI into their strategies.
According to McKinsey, only about 8% of companies have incorporated AI as a core practice when it comes to making data-backed decisions. There a few reasons for this, but one involves time. In the retail space, the average AI project can take approximately 18-36 months to complete. Because of this slow development curve, many organizations are struggling to prove the ROI of the investment. But they’re not looking long-term. The bigger risk is the opportunity cost of not beginning the adoption of AI now.
AI and VR are changing retail merchandising
One of the biggest obstacles facing brands and retailers is the ability to merchandise efficiently and effectively. Each change on the shelf has a ripple effect that can impact sales, and not understanding that impact can lead to disastrous potential outcomes. When we look at the basics of merchandising and the factors that influence its probability for success, we know that the amount of data is increasing while the time to react is decreasing; the competition is getting stronger while organizational resources are declining.
InContext recently announced our partnership with Symphony RetailAI, in which we are working towards developing a revolutionary approach that will aim to combat the slow technological evolution of AI adoption, and some of retail merchandising’s greatest challenges. This would drastically impact current merchandising processes through the introduction of placement indexing–in conjunction with the long-standing product indexing–creating the two-part synergy known as agile merchandising.
Machine learning can help identify optimal placement by category at the block- and item-levels to drive sales at the shelf. Layering this with product indexing would provide a holistic view of which products should be placed in each location for optimal returns. We would then be able to visualize this in an immersive, virtual store space.
This agile merchandising process will enable teams to quickly iterate and create an environment for more impactful collaboration. It will reduce a month-long project to weeks, and create a better, more accurate understanding of how a new product introduction or new concept will impact sales.
Companies that are risk averse or not operationally or culturally suited for the inclusion of innovative technologies, like AI and VR, have been resistant to change–and their hesitation is understandable, for now. AI is still in its infancy, and therefore education around it’s proven ability to drive smart and efficient merchandising has been hard to come by. As we quite literally face an existential crisis of survival where technological adoption is required for evolutionary survival in the market, we’re excited to show the industry how the merging of AI and VR technologies is making agile merchandising a reality.