Retail is at tipping point in terms of leveraging AI to automate everything from inventory to marketing, says Kerry Liu, chief executive officer of Rubikloud, “Five years from now,” he predicts, “if you're a top 500 retailer, you’re going to be in trouble if you’re still using teams of consultants, legacy tools, and complicated internal processes to try to figure out how much inventory a store should carry, how to price your products, or how to promote them to loyalty customers.”
Rubikloud Technologies Inc., an Intel partner, is using machine learning to predict customer intention and behavior, and to reduce the complexities of promotion forecasting. One of the major pain points the company is solving for enterprise-scale retailers is the need to make decisions based on real-time processes and data.
“Intelligent automation can make a big difference in terms of inventory allocation, general price management, promotion optimization, loyalty management — all of these business processes.”
A retail business is filled with dozens of data-intensive tasks, ranging from calculating how much inventory each store should carry to how to price promotional items. “The underlying kind of automation that's happened in the consumer space with AI and machine learning needs to be part of an enterprise software solution,” says Liu. “AI-powered software is going to automate mundane tasks that are computationally impossible for a human, and relatively straightforward for a machine learning system.”
One of the big advantages Amazon has in the marketplace is that much of its work is done programmatically. “Automation is what retailers need to compete in this environment,” says Liu. “Intelligent automation can make a big difference in terms of inventory allocation, general price management, promotion optimization, loyalty management — all of these business processes.”
The Rubikloud solution is gaining traction because it ingests data without requiring retailers to re-think existing systems. “We largely leave the legacy systems alone,” says Liu. “You're not shutting any of these systems off because you still need these systems to do what they were meant to do.”
In fact, Rubikloud combines first-party CRM, marketing automation, email, and loyalty program data with third-party data. “What we need is a regular feed from those systems into our overall platform, and we've built the connectors for that,” says Liu. “We have the ability to merge all of that retail data and move it into a single AI-ready model that lives in the cloud.”
Liu says one untapped gold mine Rubikloud can help large retailers optimize is their loyalty program. Most big retailers have tens of millions of loyalty members in their system who are willing to voluntarily share their purchasing history in exchange for some form of VIP treatment.
"The first three levels of retail that AI will impact and transform will be the supply chain, corporate head office, and front of store."
One Rubikloud success story was helping a luxury retail brand optimize their email marketing and direct mail campaigns in order to target dormant loyalty program members.
“The benefit that we've seen at the top line is about a 7 percent incremental lift in royalty revenue,” says Liu. “But, more importantly, we've been able to re-engage with loyalty members who hadn’t purchased anything in a year.”
While Rubikloud has developed powerful AI tools, the processing power to handle enterprise-scale computing comes from Intel® technology. Looking ahead, Liu says AI solutions will be even more powerful thanks to data flowing in from other Intel® technology, such as in-store cameras, RFID, and smart displays.
“What's happening specifically in the store is a blind spot for us and for every retailer right now,” says Liu. “Intel makes it possible to harvest data related to what is happening in a store. All of that data yields much more accurate predictions.”
Harnessing AI to deliver intelligent decision automation promises to help retailers analyze large amounts of data from multiple legacy sources, as well as new and offline systems.
"The first three levels of retail that AI will impact and transform will be the supply chain, corporate head office, and front of