TL;DR:
- Microsoft introduces generative AI and data solutions for retailers.
- Solutions span personalized shopping experiences, store associate empowerment, and unified retail data.
- Retailers can create personalized shopping experiences with AI-driven copilot templates.
- Store associates gain access to AI tools for improved productivity and customer service.
- Microsoft Fabric unifies retail data, offering actionable insights.
- New Copilot features in Dynamics 365 Customer Insights streamline marketing campaigns.
- Retail Media Creative Studio enhances banner ad creation and optimization.
- Market implications include enhanced customer experiences and a competitive edge.
Main AI News:
In a dynamic announcement preceding NRF 2024: Retail’s Grand Showcase, Microsoft Corporation has unveiled a compelling array of generative AI and data solutions, strategically designed to enhance the retail shopper journey. These innovations encompass personalized shopping experiences, empowerment for store associates, and the harmonization of retail data, all aimed at enabling brands to engage their target audiences more effectively. Microsoft Cloud for Retail now offers an extensive selection of copilot capabilities through Azure OpenAI Service, revolutionizing the way retailers navigate the complex shopper journey.
Retailers worldwide grapple with multifaceted challenges, ranging from high store associate turnover to evolving consumer shopping behaviors. These challenges include the surging trend of omnichannel shopping and dwindling brand loyalty, further compounded by the proliferation of fragmented, untapped data sources. To confront these issues head-on, retailers are increasingly turning to technology, and the era of AI offers an opportunity to accelerate transformation through data-driven generative AI solutions. A Microsoft-commissioned study conducted by IDC highlights that retail organizations are experiencing significant returns on their AI investments, with an average return of $3.45 for every $1 invested in AI, realized within a mere 14 months.
Creating indelible and personalized customer experiences through AI has become an imperative in today’s competitive retail landscape. A staggering 71% of consumers now expect companies to deliver personalized interactions, with shoppers who experience highly personalized encounters being twice as likely to augment their shopping carts. Nevertheless, in the realm of online shopping, the tools available for shoppers to explore products and receive tailored recommendations often fall short. To bridge this gap, Microsoft Cloud for Retail introduces a copilot template, currently in preview, empowering retailers to craft personalized shopping experiences. This prebuilt solution seamlessly integrates into existing digital platforms, such as websites or apps, simplifying the process of product discovery and purchase for shoppers.
Now, shoppers can savor the convenience of online shopping while relishing a personalized shopping journey akin to the attention of a personal shopper, just as if they were in a physical store. The copilot template enables retailers to construct personalized shopping experiences where customers can express their shopping preferences through natural language. Leveraging GPT-4 via Azure OpenAI Service, this technology boasts contextual awareness, delivering responses reminiscent of interactions with knowledgeable store associates. For instance, a novice camper planning a trip to Yosemite National Park can visit a sporting goods retailer’s website and inquire, “I’m going camping in Yosemite this March, and I have never camped before. Help me find the right gear.” Shoppers will receive natural language responses along with recommendations for essential gear and even complementary items to augment their shopping cart, elevating both basket size and customer satisfaction.
Shelley Bransten, Corporate Vice President of Global Retail, Consumer Goods & Gaming Industries at Microsoft, emphasized the pivotal role of generative AI in setting retailers apart, allowing them to offer customers distinctive and memorable experiences aligned with their brand identity. The newly introduced copilot template for personalized shopping on Azure OpenAI Service is just one facet of Microsoft’s commitment to democratize concierge-like experiences throughout the shopping journey. By providing retailers with tools to create more personalized encounters and expedite time-to-value, Microsoft aims to transform the retail landscape.
Leading retailers like Canadian Tire Corp. (CTC) are pioneering the integration of copilots into the shopping experience, adding significant value to their businesses while delivering personalized interactions to their customers. This spring, CTC is set to launch an AI shopping assistant, powered by Azure OpenAI Service, to assist customers in purchasing specific automotive products. Generative AI empowers shoppers to gain a deeper understanding of product options, enabling them to make informed decisions before and during their in-store visit.
In an industry where store associates play a pivotal role, technology can be a game-changer. However, bridging the gap between technology and store associates remains a challenge. Microsoft’s Work Trend Index reveals that 60% of retail frontline workers are enthusiastic about the opportunities digital tools bring to the sector. Still, 34% believe they lack the appropriate digital tools to perform effectively. Microsoft Cloud for Retail now bridges this gap by placing generative AI tools directly in the hands of store associates and managers, enhancing their productivity, job satisfaction, and the overall shopping experience for customers. A copilot template, currently in preview on Azure OpenAI Service, enables retailers to develop solutions that streamline store operations, granting associates and managers access to real-time insights and information. By using natural language queries on their mobile devices, tablets, or PCs, store associates can efficiently access answers about store procedures, product catalogs, HR policies, and benefits, ultimately delivering quality in-store customer service. Additionally, voice-enabled task creation and assignments save time, while easy access to customer and product information further enhances the customer experience.
Applications developed using the copilot template also provide store leaders with valuable insights into frequently asked questions from employees and customers, enabling informed actions such as training updates, procedure refinements, or guideline revisions. Microsoft Experience Centers, strategically located in New York City, Sydney, and London, are among the first retailers to adopt the copilot template for store associates. This technology equips their store associates with insights to elevate the shopping experience, fostering product exploration, demonstrations, and a deeper understanding of Microsoft technology.
The retail industry generates an astounding 40 petabytes of data every hour, equivalent to 8 million two-hour movies, requiring over 1,500 years to watch consecutively. However, the true revelation lies in the fact that most of this data remains siloed, with retailers harnessing only a fraction of its potential. To extract actionable insights and fully leverage AI, a cohesive integration and standardization of data across diverse systems and applications are imperative.
Today, Microsoft is proud to announce the preview of new retail data solutions within Microsoft Fabric. This end-to-end, unified analytics platform serves as the bedrock for harnessing the full potential of data and lays the foundation for the AI era in retail. Microsoft Fabric empowers retailers with a robust data model that is readily deployable for data governance, reporting, business intelligence, and advanced analytics. Furthermore, a real-time data connector is introduced to seamlessly integrate e-commerce data from Sitecore OrderCloud, offering retailers a holistic view of insights and tools to proactively enhance customer satisfaction and operational efficiency at every touchpoint, from storefront to fulfillment. Innovative analytics templates, such as “frequently bought together,” provide data-driven recommendations that assist retailers in optimizing product upselling and shelf optimization. With these retail data solutions, organizations can expedite the implementation of retail-specific data models, transforming their data into predictive insights that elevate customer engagement and shopping experiences.
Generative AI now takes center stage in helping retailers and brands execute successful marketing campaigns and retail media ad campaigns. Microsoft unveils new Copilot features within Dynamics 365 Customer Insights, empowering marketers to streamline end-to-end projects and campaigns. These features provide marketing teams with an AI-first experience, enabling them to initiate projects by articulating their desired outcomes in natural language or uploading existing creative briefs. Copilot responds by generating a centralized project board, simplifying campaign workflow management, and offering AI-recommended content that can be easily customized, eliminating the need for disjointed applications and saving valuable time. Customers gain access to Typeface, with its enterprise-grade generative AI capabilities, facilitating the creation of brand-authentic images across assets to enhance the impact of personalized content. Typeface also ensures content alignment with the organization’s brand kit, including themes, fonts, and product images, all sourced from a centralized asset library. These new Copilot features within Dynamics 365 Customer Insights are set for early access public preview in the first quarter of 2024.
In addition, Microsoft introduced generative AI to the Microsoft Retail Media platform, powered by PromoteIQ, through the launch of Retail Media Creative Studio. This comprehensive banner ad creative solution, tailored specifically for retail media, debuts in preview starting in January 2024. With Retail Media Creative Studio, retailers empower their advertisers to swiftly auto-generate and edit banner creatives using generative AI. Retailers can then review and approve these creatives for deployment across various retail media channels, including the retailer’s digital properties and the open web. This solution optimizes banner campaign performance with AI-driven algorithms, delivering a more personalized shopping experience. Retail Media Creative Studio unlocks creativity, enhances productivity, and opens up new revenue opportunities for retailers and advertisers alike, catalyzing the growth of their retail media business.
Conclusion:
Microsoft’s AI-powered innovations in the retail sector promise to revolutionize customer experiences, empower store associates, and unlock the potential of retail data. This strategic move positions Microsoft as a key player in helping retailers stay competitive and deliver exceptional customer engagement, setting the stage for a dynamic and data-driven future in the retail market.
