Data Science: the business picture
January 23, 2019
Advanced analytics and artificial intelligence (AI) allow discovering new sources of growth
January 7, 2019
Data Science: the Science is in the Detail
November 15, 2018
AI Is to POS What the POS Was to Cash Registers
- Aug 29, 2018
- By Shantanu Pasari
Take the next step up in retail analytic technology.
For over half a century, cash registers and tills were simple machines that held cash, printed receipts, and determined change due from a purchase. These machines have now been almost fully replaced by cloud-based POS systems.
The modern POS system can run sales and inventory reports, collect and collate customer data, and recommend offers for registered customers. It’s a huge jump from the old days, but there’s still a long way to go.
Retail businesses depend on POS reports to provide insights into their customer base and their habits. In fact, they’re the only source of data that businesses might have for their offline operations. While a POS platform is essential, it does not solve all the issues that a modern retail business faces. AI is what you need to take your POS system to the next level.
Limitations of the modern POS
POS platforms provide only a rudimentary level of customer behavior tracking. We can see the basic information about the customer along with their purchase history. This information can be used to determine which add-ons and promotions to offer the customer. However, this is only an educated guess, and there are a lot of gaps to fill.
AI takes these necessary next steps. Using AI, retailers can track a customer’s journey through the physical store much the same way we track users on websites. When combined with cameras and sensors, it’s possible to understand exactly how customers are interacting with the store. If you are thinking: “What do you mean?”, check this video.
With AI, it’s possible to see every item a customer looks at or picks up to examine before replacing on the shelf. This level of detail helps in understanding what may have caused a missed sale, along with the better planning of where to place products on shelves within the store.
Inventory management is another function POS systems carry the burden of. However, it’s difficult for today’s POS solutions to predict how much of an item to stock. This is largely still a manual process. HIVERY, however, has already cracked the code for AI-based inventory management in vending machines, and we’re quickly taking the same intelligent design and domain expertise to the retail store.
Taking retail analytics to the next level
AI sees the world from a different perspective than the human mind. Human minds are prone to making biased decisions, stemming from our innate cognitive biases. AI eliminates bias by focusing entirely on data, as data, indeed, has a better idea.
A recent IBM study shows that 45 percent of customers expect the same personalized shopping experience in stores that they get online. Businesses want to provide this experience, but it’s impossible without cognitive computing.
Let’s look at Amazon – when you shop on Amazon, you’re presented with product recommendations based on cutting-edge data analytics. These algorithms use your Amazon search and purchase history combined with your total online history to determine what you’re likely to want and buy.
Your POS platform can’t accomplish this without the help of AI. Not only can AI be trained to achieve a deeper understanding of customer behaviour, but it also gets smarter with time. The more it’s used, the more it calibrates itself to give meaningful and accurate insights.
AI is surely the imminent next step in retail analytics. While a POS system gathers the necessary data, AI leverages the data to drive the right decisions. Working hand-in-hand, AI leads to decreases in overhead, increases in revenue, as well as helps retail businesses succeed in ways never thought possible before.
How the cash register evolved…
POS system cash register replacement
Cloud-based POS systems
4 ways AI is disrupting the FMCG in a good way
How artificial intelligence is powering retail customer experience
Three AI marketing trends…