Artificial intelligence is bringing a revolution with retail automation

Hello there! We were hoping to talk about the impact of AI (artificial intelligence) on retail automation. Glad you could join us. When you read or hear about retail or the technology that is bringing revolution to the retail industry, you can never keep artificial intelligence out of it. With Artificial Intelligence (AI), retailers can create data models to derive insights and build prescriptive or predictive decision engines. This can help retailers with things like demand forecasting, allowing them to make better data-driven decisions.

79% of retail and consumer products companies expect to be using intelligent automation for customer intelligence by 2021 — IBM

AI is the retail industry’s new superpower. The adoption of Artificial Intelligence (AI) in the retail sector has been the most actionable. Retail businesses can automate their entire process using AI and ML for increasing

  • Accuracy
  • Efficiency
  • Scaling operations

Be it acquiring new customers with data, creating a better catalog, managing inventory to recording post-purchase experience — AI and ML will have a holistic impact on the retail sector.

That is the technical side of this conversation; let us talk about the human side of it. Costco earns USD 1540 per square foot of space, double of Walmart’s earnings, even though Walmart offers lower prices on its products. Amazon is virtuous, and that is no hidden fact. Trader Joe's offers products that cannot be found anywhere else. Take any successful retailer in this modern business age, and you will see that they are driving the process with low cost, great convenience, speedy response, and providing a memorable experience to their customers.

So, where do AI and ML come into the retail action?

The global artificial intelligence in retail market size is expected to grow to USD 5,034.0 Million by 2022, at a Compound Annual Growth Rate (CAGR) of 38.3%. — Markets and Markets

Retailers must take notes from the mistakes their competitors have made in the past and start including next-gen technologies such as AI and ML in their retail process. The question you will ask is, how can this be done?

Adopting the business-IT mix will significantly impact the core business processes across all business verticals. Let us explain this with reference.

Here is a general retail consumption flow. The physical product or service undergoes various stages before reaching the end-user. The stages are

  • Planning
  • Sourcing
  • Producing
  • Distributing
  • Selling

Remember those bulky logs used to maintain the entire inventory, be it for manufacturers, distributors, retailers, or even the end-users. Yes, in layman terms, they all were doing the same thing, tracking stock, and entering data for future reference.

Now, it is easier for one household to keep track of their monthly inventory using a notepad. But for manufacturers, distributors, and retailers, that tool alone will not make any business sense, will it?

Imagine the data trail one physical good leaves when it moves from being a raw material to a product and then traveling to the warehouses, store shelves, and the user’s storage room!

Simply put, a product leaves a massive set of data at each phase. Retail business has moved ahead of those times and has already started leveraging the data to improve its revenue.

The key factors that are fuelling the growth of AI in retail:

  • A necessity for superior surveillance
  • Monitoring at a physical store
  • Growing awareness and application of AI in the retail industry
  • Enhanced user-experience
  • Improved productivity
  • Return on Investment (RoI)
  • Mainlining inventory accuracy
  • Supply chain optimization

85% of retail and 79% of consumer products companies plan to be using intelligent automation for supply chain planning by 2021 — IBM

The retail industry is also witnessing the flow of information in the reverse direction. This flow is mostly rising from the need for finding ways to

  • gather, process, and analyze customer data,
  • gain additional insights into product performance, user feedback, and post-purchase behavior
  • resolve the ecosystem bottlenecks
  • check the competitive response

Retailers heavily focus on retrieving the information from the point of purchase. They also want to analyze consumer behavior and product feedback. Artificial intelligence and machine learning can automate the process of generating these insights for retailers. This move will take them closer to the end goal of running their operations at low cost, with great convenience, the agility of responding to their end-users needs and provide the customers with a memorable shopping experience.

How do AI and ML impact the retail process in practicality?

Good question. Every theory has to be backed with practical application. In the case of the retail industry, too, this statement is true.

While talking in context with what we covered above, the retail automation plan should be somewhat like this:

Automation of goods and services

Retailers can implement artificial intelligence for the automation of the most repetitive tasks in their supply chain process. This will enhance their cost-related parameters such as production, inventory management, and turnaround time.


Adidas has been using the technological advancements in robotics and automation to bring production closer to customers for much faster delivery of their new shoe styles, avoiding the hassles of longer delivery durations. As a sports apparel company, Adidas has invested heavily in virtualization for the sampling of its product. The virtualization technology is used for rendering the virtual product to make accurate decisions before going forward with full-scale production.


Alibaba is using a new blockchain-based food supply chain to reduce fraud, ultimately cutting down its miscellaneous expenses.


This e-commerce giant has already set the standards for supply chain management. Apart from the use of robots in its warehouses and using drones for delivering products to its customers, Amazon deployed autonomous trucks and forklifts for reducing delivery costs.

Our motive here is not to overwhelm the traditional retail industry by sharing the examples of these ecommerce giants. However, many businesses have already applied automation to their highly complex business processes. Let’s take P&G, for instance. They have automated workflows in place for minimizing exceptions and executing end-to-end planning.

Target, the second-largest discount store retailer, has installed a goods-to-person automated fulfillment system that allows the staff to simultaneously pick up stock for several stores from their workstations.

Automation of data flow and decisions

Retailers are always trying to improve their customer service. The reason is simple, poor customer service results from

  • unfulfilled commitment
  • untimely stock-out
  • inconsistent communication
  • unreliable delivery

Retailers can leverage the knowledge of the supply chain to improve their customer service drastically.


Walmart uses collaborative planning, forecasting, and replenishment to enable the vendors and distributors to forecast the sales and then optimize its supply chain. Decisions are taken on the inventory level to ensure customers find what they need.


Luxury department stores chain Nordstrom uses software to ship goods directly from the manufacturer to the consumer. Once an order gets generated on the retailer’s website, the software sends it to the manufacturer. The manufactured packs and ships the products directly to the customer’s delivery address. This move allowed Nordstrom to reduce inventory holding costs and improve customer service using data and insights-driven stock allocation.

Automation of the end-to-end ecosystem

Distinctiveness is the crucial element that helped Trader Joe’s get the success it was targeting. Be it the micro-niche products, the thoughtful assortment of an item, a lively atmosphere. Trader Joe’s has provided a unique customer experience making it stand apart from the crowd.

With the help of insightful data, brands can create an instinct and know what the customers want for a great shopping experience. Capturing post-sale data becomes crucial for retailers at this point.

They require close integration of various processes such as the supply chain management and the ecosystems where both physical goods and relevant data flow from end to end.

Let’s say that IoT will move close to 60 billion connections by 2021. As it grows, the number of data points will increase too. There will be more IoT-based data in longer supply chains, creating humongous ecosystems.

Retailers must go all out and carve a niche for themselves for recurring customers. To do that, they will need automation for raising the efficiencies, service levels, and quality of customer experience.

To conclude: Next-gen tools like AI, ML, and big data have reshaped retail automation

With AI, ML, big data, and analytics technologies, making great strides, retailers have already started leveraging them for creating an automated supply chain plan and various knowledge-based processes.

Many CPG companies deploy predictive analytics for analyzing hundreds of variables, such as weather and social trends, for developing a more accurate demand forecast.

Retail businesses are seeking various methods to emulate success. Including artificial intelligence (AI) is one of the most significant business imperatives. Who doesn’t know or use Netflix! This $100-billion entertainment company has about 75 percent of its content consumed by around 125 million subscribers and who is suggesting those content to them? An AI recommendation system.

Retail is undergoing an AI-driven revolution, and if we take the predictions into account, the application of AI in retail will reach $27 billion by 2025, up from $713 million in 2016, as per the Artificial Intelligence in Retail Market Report 2018–2025. There are many who have conquered this segment, like Amazon. But the playing field is not yet populated because many retailers have not taken proper advantage of this revolution. And that is where Rapidops come in.

Choose Rapidops as your digital partner for this retail automation revolution

Rapidops is a leading digital transformation and innovation company that helps Fortune 500 companies and innovative startups to monetize their digital opportunities and transform their business. We have helped various retailers, such as Harris Teeter, overcome their digital transformation challenges. We helped them reimagine their customer experience across multiple channels such as web, mobile, and stores.

We specialize in developing high-quality, scalable, and re-usable “digital assets” for our customers using the most advanced technology, design, and analytics.

If you were intrigued with the idea of retail automation and want to bring that revolution into your business with the use of next-gen technologies, then do contact us. We will be honored to be a part of your business success.

Rapidops is a product design, development & analytics consultancy. Follow us for insights on web, mobile, data, cloud, IoT. Website: