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How Artificial Intelligence is Affecting Different Retail Functions

When glancing at the retail industry’s most recent digital transformation, it can be easy to overlook the challenges digital retail pioneers had to overcome. Digital pioneers, like Amazon, had to create a positive retail experience and make it simple for customers. How did they do this?

Artificial intelligence, analytical methods that learn from data without relying on humans to set the rules, made all this possible. This new wave of disruption has left many physical retailers struggling to compete on price, assortment, and convenience. However, just as AI-powered advances in e-commerce, it can also offer the catalyst for change in brick and mortar stores.

In this article, we will take a look at how different companies are using artificial intelligence in different parts of their business.

Product Design

Artificial intelligence can be a powerful tool for deciding how to design better products.

Jacket design for Tommy Hilfiger’s Reimagine Retail project with IBM.

In 2018, Tommy Hilfiiger announced that it was working with IBM and the Fashion Institute of Technology on a project called “Reimagine Retail,” the goal of which was to use artificial intelligence to help Tommy Hilfiger better understand customer sentiment around its products and design better patterns, silhouettes, colors, and styles. Researchers from FIT used IBM technology to analyze 15,000 of Tommy Hilfiger’s product images, alongside 600,000 runway images and almost 100,000 images of different generic patterns and clothing fabrics. That information was then used to develop new styles, rooted in Hilfiger’s style but incorporating trending patterns and colors, for Hilfiger’s design team.

Demand Forecasting

When walking around any store, customers take product availability for granted, but it takes a lot of effort for retailers to optimally stock their stores. It is crucial for businesses to be able to precisely anticipate demand for products. Companies need to become more efficient in handling working capital and managing inventory amidst the dynamics of business operations and changes in consumer behavior.

The use of AI-powered analytics solutions can help businesses forecast inventory demand with high accuracy.

Walmart uses a demand forecasting model that generates demand forecasts with a full 52-week horizon every week for about 500 million item-by-store combinations in the US by taking into features such as historical sales (from the last few weeks and the same time period last year) and information about promotions like the Super Bowl.


General Electric’s Brilliant Manufacturing software was designed to make the entire manufacturing process, from design to distribution and services, more efficient and hence save big costs over time. The software includes a suite of analytics and operational intelligence tools appropriate for a range of manufacturers. The WIP Manager software, for example, provides manufacturers with floor-specific and plant-wide visibility of all work in process, such as lead time for each work center. An operational supervisor sitting behind a computer can now identify a floor-based problem throughout the workflow in real-time, rather than spending time making time-consuming walkthroughs of entire manufacturing facilities.

Personalized Shopping Experience

Kroger’s digital shelf

Kroger has introduced a new technology in its stores called Kroger EDGE, which enables Kroger to replace traditional shelves with digital shelves. This technology enables personalized offers to be presented to customers as they approach the digital display. By using facial detection technology, the age and gender of the customer is identified, and a customized message is presented on the digital shelf.


Even as we speak, more and more brick-and-mortar retailers around the world are faced with dropping sales that force them to close their stores or move their business online. Furthermore, they find themselves competing with those online retailers who decide to expand their reach to physical sales. The message is clear: traditional approaches to retail are becoming obsolete in the wake of technological process. To stay afloat, retailers must keep pace with the ways artificial intelligence is propelling digital transformation of retail.


Cyclops is a retail analytics system that can help retailers generate insights into how their customers shop inside their stores. To understand more about how Cyclops can help retailers digitally transform their stores amid the COVID-19 pandemic, visit our website:


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