Technology Insights

How Retailers Are Using Artificial Intelligence to Drive Customer Experiences

5 Mins read

Artificial intelligence (AI) is a big industry buzzword. While it has many applications, it is rapidly penetrating its roots into the retail sector. There is a lot of talk about how it can change the way retailers approach their customers and service them. The promise of AI is to enable retailers to create personalized online experiences, provide targeted recommendations and virtual styling looks. Retailers are then able to analyze data to predict inventory needs and predict trending clothing styles. According to a 2018 survey by Capgemini, AI could save retailers as much as US$ 340 Billion annually by 2022.
As part of our initiative to uncover how technologies align with business outcomes, KAIROS had a discussion with two emerging AI solution providersIntelistyle (in the UK) and Tuzo (in Singapore). We talked to Kostas Koukoravas, Founder & CEO of Intelistyle, and Mohit Agrawal, CEO of Tuzoabout some real-world examples of how AI is transforming the retail sector, especially fashion and apparel. 
Intelistyle – AI Styling Solutions 

Intelistyle, based in the UKbrings AI-based styling solutions to fashion retailers, enabling them to create personalized styling recommendations for customers. Both online and offline retailers benefit from these AI solutions as they result in higher conversions, better engagement and repeat business. 

KAIROS: Can you give some specific examples (from operational and customer perspective) of how AI is aligning with the business goals of retailers, solving their challenges and creating unique customer experiences? 
Intelistyle: On one hand, AI is disrupting existing fashion retail business models, but on the other hand, it is empowering retailers with tools to optimiztheir supply chain, inventory management and user experience. For example: 
Chalhoub Group, one of the biggest luxury retailers in the UAE recently introduced an AIbased solution to forecast demand and optimize decisions around buying, first allocation, replenishment, and store transfers across their network of physical stores. That reduced stockouts and increased sales while reducing manual work previously done by employees. 
The companies that benefit the most though are those that innovate by integrating AI as a core part of their business model. Wear That, an innovative styling service, sends customers a selection of outfits at home after a phone styling consultation. By using Intelistyle’s AI, they have managed to decrease the time and cost to ship a box, by 30%. They have also reduced operational costs and have been able to serve more customers per stylist. And this is only the beginning. AI can be integrated across multiple customer experience touchpoints. For example, an AI chatbot will further reduce the cost of a phone consultation, allowing stylists to automate repetitive tasks and focus on the most creative aspects of styling. 
KAIROS: Can you tell us how your platform fits into retailers’ digital strategy and their ecosystem? 
Intelistyle:  Intelistyle provides AI styling services to fashion retailers to help them address the needs of customers that are looking for styling advice. It does that by creating outfit recommendations across each touchpoint of the customer journey.  
Our AI engages and profiles users on social media offering styling advice through a chatbot. It recommends the right products and outfits for them on a retailer’s eCommerce website, increasing conversion. It supercharges instore sales execs to be expert stylists and increases the Average Order Value through clienteling software integrations.  
Our AI solution even recommends clothes that go along with what the customer is wearing through a smart mirror. It uses the knowledge it collects about customers across multiple channels to send email campaigns with clothes that complement the user’s wardrobe and style. This allows retailers to create personal online or instore experiences at a fraction of the cost, while increasing Full Price Sell Through, Conversion and Average Basket Size. 
Intelistyle allows retailers to scale their teams to cater to the needs of each customer, delivering a premium experience. An experience which would previously be reserved just for the VIPs due to the costs of providing such a service. The companies that benefit from the biggest ROI though are those that innovate by integrating AI as a core part of their business model, said Kostas Koukoravas, Founder & CEO of Intelistyle. 
Tuzo – Leveraging AI for Retail 

Tuzo, based in Singapore, brings innovative AI solutions that help retailers hyper-personalize stores. Harnessing the power of artificial intelligence and machine learning, Tuzo helps retailers tailor shopping experiences as per shoppers’ preference, real-time web browsing habits and shopping data. The platform not only helps increase revenues for retailers but also generates data that helps in demand planning and gain invaluable shopper insights. The company is targeting both offline and online retailers that sell apparel, lingerie, beauty, bags, footwear, and jewelry.

KAIROS: Can you give some specific examples (from operational and customer perspective) of how AI is aligning with the business goals of retailers, solving their challenges and creating unique customer experiences? 
TuzoThere are many exciting use cases of AI that have emerged in the last couple of years. AI is helping retailers getting to know their customers better, increase customer satisfaction due to personalization, and make retail operations more efficient by better demand planning and inventory optimization. A few specific examples are as follows: 
Digitization is the first step for any digital transformation effort. Currently, retailers spend a significant amount of time in creating the product catalogs as product tagging and description are done manually by content writers. The manual nature of tagging makes it prone to mistakes and lacks structure, which results in poor product discovery online (poor SEO). The tagging can be automated using computer vision where the images are viewed by the machine and tags are generated automatically with the product description and style note. The process is completed in a fraction of time and costs while resulting in better product discovery.  
Visual search is another example which makes shopping convenient, fast and easy. If a shopper likes a product, all he or she needs to do is take a picture or upload it on the retailer’s website and similar products would be shown to the shopper. Visual search has proven to increase sales significantly as shoppers are able to find the product faster.  
Cameras mounted on walls or moving robots are being used in department stores to identify the stock levels, wrong placements and wrong pricing/labels. Computer vision and AI help in better store operations by analyzing the data from the images. 
AI can be used for demand planning as the system can learn about consumption patterns, consumer preferences. This data can further be used more meaningfully in conjunction with external factors like weather, economic conditions, etc. Tuzo captures loads of data on consumer preference as a result of personalized shopping that can be used for demand planning and product sourcing. 
KAIROS: Can you tell us how your platform fits into retailers’ digital strategy and their ecosystem? 
TuzoAny digital strategy of a retailer is centered around better customer experience, higher sales and brand advocacy. Our retail solutions provide deep personalization experience to retail customers, which leads to higher conversion rates, bigger basket size and increased customer satisfaction leading to higher revenues. We aim to bridge the digital divide by providing an experience akin to online even in the brick and mortar stores. Our solutions enable retailers to digitize their inventory with rich tagging using automated tagging and present the store inventory in the order of shopper’s preference. We also offer a visual search and style advisor to help shoppers decide on their purchases. In short, we make shopping fast, simple and personalized. 
Our solutions provide meaningful insights to the retailer so they can understand their customers’ buying journey and prospect them with highly personalized offers leading to increased foot traffic and incremental revenue.  
“Over 75% of retail sales globally are from brick and mortar stores and this is not going to change significantly in the foreseeable future. Thanks to Artificial Intelligence and digital devices, we have a chance to bring the digital fluency to offline stores and radically change the way we sell. Retailers embracing digital technologies are likely to stand out in an otherwise crowded space,” said Mohit Agrawal, CEO, Tuzo.  
If you have a real-world story on how technology has aligned with your desired business outcome, please reach out to [email protected] 

Ratika Garg
23 posts

About author
Ratika is the COO and Co-Founder of KAIROS Pulse. She has over 15 years of strategic research and consulting experience of working with enterprises in the areas of market and competitive intelligence, market sizing and trends, and creating compelling business use cases.
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