Innovative AI algorithms promise to revitalise the retail industry
The way we shop is constantly evolving, powered by the inexorable rise of the internet. Advances in e-commerce have made the process easier for consumers and many traditional retailers are feeling the pinch. Every day, 16 bricks-and-mortar shops close in the United Kingdom, and 7 000 per year in the United States. With the onset of COVID-19, this trend is likely to increase. One analysis predicts 55 % of traditional shops are at risk of bankruptcy due to the crisis.
Enter the Radius AI solution
The EU-supported RDS project has contributed to a solution that will hopefully allow e-commerce and traditional forms of shopping to successfully coexist and thrive together. A series of AI algorithms to automate strategic planning and the execution of commercial real estate operations can help. “These AI algorithms harvest multilayered, complex data sources that are out of retailers’ reach. They then process the data to deliver insights that can boost profits, right down to postcode level,” explains Burak Capli, project coordinator at Radius Tech Fashion Services, based in the United Kingdom. Through Radius technology, each month vast amounts of e-commerce transactional data are harvested from 2.9 billion transactions over 68.7 million products. Additionally, every 2 days, 10 million consumption-related datapoints are added to complete the transactional data. “Simply put, Radius harvests and processes the shopping journey of every 15 out of 100 consumers. This advancement is regarded as a great breakthrough for the retail industry, as businesses collectively lose over EUR 1.2 billion a year due to the inability to capture and manage data,” Capli continues. To capitalise on this rich data source, AI algorithms based on ethnographic principles have been developed: no ‘off-the-shelf’ tools have been used. This innovative technology offers the potential to map holistic and yet very granular shopping patterns. The analysis takes into account over 500 datapoints, including age, marital status, income, likes and interests and topic/trend/product/brand affinities. “This enables us to identify consumers’ digital personas, based on lifestyle and consumption preferences, and reflect this in both the real-life and retail context,” says Capli. A lot of research into the feasibility and value of the technology to the retail sector has been undertaken by Radius, which the EU-funded RDS project helped to support. Throughout the project’s lifespan, Capli and his team had meetings with 89 retailers and 12 commercial property investors that together own over 500 shopping centres across Europe. The success rate of the technology was so impressive that several of them have since signed further agreements with Radius.
Continued development in a post-COVID world
As, hopefully, the pandemic subsides over the coming months, Capli is optimistic that solutions such as those developed by Radius will contribute to rebuilding the most impacted industries, one of which is without a doubt the retail sector. For Radius specifically, the aim is to continue to develop its solutions and contribute to a more democratic, fairer post-COVID world. “Radius will support industries to infuse technological innovation into their DNA, matching the technology with the consumer to the benefit of everyone. Our democratisation of data will lead to transformed, optimised and effective business models for direct-to-consumer industries,” Capli concludes.
Keywords
RDS, Radius, AI, retail sector, e-commerce, ethnographic principles
