Microsoft is using artificial intelligence (AI) to help Trakomatic, a Singapore-based video and sensor technology start-up, deliver intelligent retail experiences.

With consumers increasingly demanding seamless online-offline shopping and sustainable business practices, some organisations are selecting Microsoft Azure to help transform inventory management and turn fragmented data into actionable insights. Trakomatic is using AI with companies such as Coles, Harvey Norman and EZR.

“As a proudly Australian retailer for the past 105 years, Coles has constantly evolved to meet the needs of our customers from a single general merchandise store in Melbourne to the first supermarkets and now same-day delivery to customers’ kitchen benchtops,” said Roger Sniezek, chief information officer for Coles. “Our long-standing relationship with Microsoft will enable the smarter selling pillar of our strategy through efficiency and pace of change.”

According to the latest findings from Microsoft Asia and an IDC Asia-Pacific study, retail organisations that have adopted AI are already seeing improvements of 16 to 19 per cent in customer engagement, business intelligence, profit margins, competitiveness and innovation. By 2021, retail organisations in the region expect AI to drive a further improvement of between 37 and 44 per cent in these areas.

“Upended by a US$1.5tn ecommerce market, retailers in the region must quickly adapt to savvy, connected consumers that generate a trail of digital and omnichannel footprints that can be analysed,” said Raj Raguneethan, regional business lead for Microsoft Asia. “These footprints are generated from consumers combining channels like mobile, app, in-store and desktop throughout the purchasing process. To stay competitive, a shift to intelligent retail is required to add ease, convenience, customisation and automation across business processes and operations, customer experiences, and the very products and services offered. This can be done by turning to cloud and AI tools as the underlying, connective tissue for digitisation and business transformation.”

With AI and facial recognition technologies built on Microsoft Azure, Trakomatic offers retailers a customer service ecosystem that is integrated with their customer loyalty programmes. These have been accredited by the SG:D programme, which is part of the Singapore government’s Digital Economy growth strategy.

Trakomatic’s AI technology recognises a VIP once they enter the mall if they have opted in to the programme by signing up for the service and providing an image. It then sends them a personalised message such as an SMS recommending a pair of trainers if they are a sports enthusiast, for example, and directs them to the store. Along the way, the mall’s digital signage knows when the VIP is near and changes its content to reinforce the sent SMS. When the VIP arrives at the store, the system alerts the service staff via their devices, who can then engage the customer and offer a personalised experience or additional discounts.

Trakomatic’s shopper engagement module was introduced at the Lenovo Flagship Store to address these demands, enabling the on-ground team to recognise, anticipate and serve customers proactively with data and insights.

“Delivering great customer service is never easy for any brick and mortar store, as customers now increasingly demand nothing less than seamless shopper experiences across traditional and digital touch points,” said Constantia Ang, sales director at AddOn, a Lenovo distributor in Singapore. “Ultimately, this helps staff make more informed business decisions.”

Besides enhancing the customer experience, Trakomatic’s tools help retailers measure and improve the effectiveness of marketing campaigns, track sales conversion rates, and discover shoppers’ average basket size, as well as forecast which days and locations are likely to experience heavy traffic.

“Even as ecommerce is growing, consumers still want to touch and feel products,” said Shaun Kwan, co-founder and COO of Trakomatic. “Merchants are therefore looking to marry the physical and digital to reduce their stores’ footprint, engage omnichannel consumers and grow their sales at the same time. Through the years, we have developed technology to securely collect and anonymise shopper data streams and have partnered with Microsoft to bring to life capabilities that are integrating digital and offline retail experiences.”

While the infusion of AI is proving to be a winning strategy for the likes of Trakomatic, the following findings from Microsoft Asia and IDC Asia-Pacific also reveal that more needs to be done for the region’s retail sector to increase AI’s potential:

Seventy-one per cent of decision-makers in retail believe AI is instrumental to their organisation’s competitiveness over the next three years, but only a third have embarked on their AI journeys, putting retail behind other industry sectors.
While retailers in the region prioritise transforming the customer experience and leveraging data for operational efficiency and insights, many lack the infrastructure and capabilities to implement AI successfully to achieve business growth.
Decision-makers in retail underestimate their workers’ intent to reskill.
“Retail is in the process of being reimagined in the Asia-Pacific region,” said Victor Lim, vice president at IDC Asia-Pacific. “Through the research commissioned with Microsoft, we are seeing how, across sectors, the convergence of the physical and digital worlds brings the opportunity for data to be responsibly and intelligently utilised with AI. The retail sector continues to show promise in the New Year, and enabling investments in AI-enabling capabilities and infrastructure will be necessary for retailers to unlock the full potential of their operations and employees, and, ultimately, future-proof their businesses.”

EZR is another example of a retail player that has transformed its capabilities and infrastructure to enable AI. As China’s next-generation customer relationship management (CRM) platform, EZR is integrating fragmented information on brands and customers onto its unified commerce platform. Powered by Microsoft Azure Machine Learning Service and Microsoft Dynamics 365, EZR allows retailers to understand customers’ digital behaviour and deliver tailored interactions in-store and on social channels to shape purchase decision journeys.

“China’s ecommerce industry is huge and, for retail players, their customer data can be spread out across various fragmented sources, platforms, web sites, online and offline,” said Jie Min, CEO of EZR. “We are working closely with Microsoft to enable retailers to marry the sources, analyse user profiles, provide sales forecasts and present predictions in a visually appealing way on Power BI that is helping managers make important decisions.”

Katie Page, CEO of Harvey Norman, added: “Customers must be able to make decisions holistically, especially in a digitally-connected world. This has always guided how we curate our assortment of offerings, and it now shapes how we look at connecting online and offline channels seamlessly for our customers. Synchronised shopping is a major step in the right direction to help all of us live this connected life.”