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Retail is one of the most dynamic industries in the world, constantly changing and forcing companies to respond quickly. According to McKinsey, a retailer’s actions in the next two to three years could position it for success in the next 20. In this environment, retailers are turning to the power of generative AI to provide the edge that will help them stay competitive and profitable.
This was overwhelmingly apparent at the National Retail Federation’s (NRF) Big Show where the retail and consumer goods industries recently gathered to hear from the biggest changemakers, experience the latest innovations, and make connections that matter. As always, Microsoft played a prominent role in this year’s event with new announcements and a showcase of industry innovation.
With copilot templates on Azure OpenAI Service, retail data solutions in Microsoft Fabric, copilot features in Microsoft Dynamics 365 Customer Insights, and the Retail Media Creative Studio in the Microsoft Retail Media Platform, Microsoft Cloud for Retail provides diverse options to integrate copilot experiences across the entire retail ecosystem. Let’s take a look.
Amplifying the Customer Experience
Retailers now have the ability to build more individualized shopping experiences across their existing web sites and applications thanks to a new approach to eCommerce from advances in generative AI. New copilot templates, built on the Azure OpenAI Service and the Microsoft Cloud for Retail, use a retailer’s existing systems and data and integrate it with natural language processing capabilities so companies can add products to websites and apps simply by saying what they want. Once the retailer is satisfied with the template design, it can then be embedded into its website or app. Now, shoppers can benefit from the convenience of online shopping with the experience offered by a personal shopper, just as they would if they were shopping in a physical store.
A copilot template is also available for store workers and managers, available on smartphones, tablets and PCs to give additional insight and information into the flow of work. Using NLP, workers can get real-time responses on any issues, as well as use voice commands to assign tasks and access product information.
Shelley Bransten, Microsoft’s global retail corporate vice president said: “We are committed to democratizing the concierge-like experience across the shopping journey through copilot templates that help retailers create more personalized experiences and reduce time to value.”
Real-time Marketing Campaigns
Other copilot features will transform marketing workflows and improve campaign ROI by uniting business data with Copilot features that deliver outcomes faster and more efficiently. It’s Microsoft’s initial AI-first experience that allows marketers to describe a desired campaign outcome in natural language and let generative AI suggest, build, launch, and monitor campaigns in real-time.
Marketers can upload a creative brief into copilot, and using that, copilot generates a centralized project board, allowing marketers to manage and update their campaigns and get AI-recommended content. Microsoft said these new copilot features, available in Dynamics 365 Customer Insights, will be available for early access public preview in the first quarter of 2024.
CPG Brands get New Tools
CPG brands will have another tool in their arsenal with a new generative AI-enabled service that creates banner ads for retail media, through the Microsoft Retail Media platform and Retail Media Creative Studio.
The solution optimizes banner campaign creation and performance using AI-powered algorithms and delivers a more personalized shopping experience. “With Retail Media Creative Studio, retailers can empower their advertisers to quickly auto-generate and edit banner creatives by using generative AI,” Bransten said. “Retailers can then review and approve for use across multiple retail media channels, such as the retailer’s owned digital properties and across the open web.”
An IDC study commissioned by Microsoft found that for every $1 a retail and consumer packaged goods company invests in AI, it is seeing a return of $3.45.
Revolutionizing Retail Analytics
Data, and what AI can do with it, holds endless possibilities, but only if you can get at the data and have the right tools to analyze it. Microsoft’s Fabric platform now gives retailers a data model to help them plan and design data solutions, as well as analytics templates that provide actionable recommendations to improve product upselling and optimization.
The solution includes a collaboration with Sitecore that includes a data connector to bring e-commerce data from Sitecore OrderCloud into Microsoft Fabric. The connector means that data for three important areas: product, customer, and orders, has been mapped to Microsoft’s retail industry data model, reducing engineering effort and accelerating time to insights. Because it’s all done in real time, retailers can access insights to proactively improve customer satisfaction and business operations at every touchpoint from storefront to fulfillment.
“Seeing Microsoft and Sitecore leverage Azure and Microsoft Fabric for this transformation shows the immense potential AI has to revolutionize how retailers can use data proactively,” said Tony Martin, a Hitachi Solutions’ Business Development Director. “The upside for companies to take immediate action to fine-tune offerings and respond to the market is immense.”
Supercharging Retail Search
Search is changing thanks to AI and everyone knows it’s critically important because all online shopping starts with search. Search isn’t just about results and data; it’s conversational and requires context so AI tools change the game. For some time, companies have been seeing trends where fewer and fewer customers are navigating menus to find what they want.
In 2024, AI search tools will further improve the digital shopping experience with better browsing. Walmart is one mega retailer that is using its proprietary data and technology and large language models, including those available in Microsoft Azure OpenAI Service, as well as retail-specific models built by Walmart, to serve up a curated list of the personalized items a shopper is looking for.
For example, let’s take a parent planning a birthday party for a child that loves unicorns. Instead of multiple searches for unicorn-themed balloons, napkins, streamers, etc., the parent can simply ask the question: “Help me plan a unicorn-themed party for my daughter.”
One of the reasons why Walmart and other leading retailers are choosing Azure OpenAI Service is the ability to access the most advanced AI models in the world while backed by the enterprise-grade capabilities found in Microsoft Azure including security, compliance and regional availability.
CPG brands are constantly facing pressure to provide customers with a frictionless and complete buying experience, all while tailoring that experience to the interest and needs of the individual. Many of the new innovations announced at NRF 2024 and by Microsoft will help them get closer. At Hitachi Solutions, we’ve been helping retailers for years in their efforts to modernize systems, create differentiated experiences, develop more successful marketing insights, and gain market share across all channels and customers.
If you have these needs, or want to chat about the future technology can play in your company’s strategies, reach out today!