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New technologies are rapidly finding their way into retail environments, with artificial intelligence in the lead. Smart RetAIl, a solution developed by Axians Portugal, is designed to boost commercial performance at the point of sale.

Inflation is heightening competition in the retail sector. The major distribution chains are pulling out all the stops to attract consumers and improve conversion rates, which refer to the percentage of total visitors who make purchases. Now more than ever, this ratio means everything in the sector.

An important element in increasing this conversion rate is an optimised shelving layout. This often depends on specific conditions (e.g. whether or not to open or renovate a store) and is based on limited sources of information (footfall, sales figures, etc.) that do not always yield accurate data on actual customer behaviour in the store.

 

Better understanding of the customer

In order to improve understanding of customer behaviour and boost conversion rates, for the past two years, Axians Portugal has developed an AI-based solution in collaboration with a Portuguese consumer electronics retailer. Named Smart RetAIl, this tool provides retail managers with precise information about their customers’ behaviour in store.

“The store manager’s role is to determine how best to organise their point of sale to maximise revenue,” explains Joana Morgado, Data-Driven Manager at Axians Portugal. “To do this, they need to identify the most profitable locations and change the shelf placement to most effectively attract the attention of their best customers. They also need to refine their staff training to improve the level of customer engagement.” This is where technologies such as AI come in.

 

Pre-trained models and GDPR

For its Smart Retail solution, Axians Portugal uses cutting-edge pre-trained detection models to precisely identify customers and their behaviour in video surveillance footage. “Computerised visual analysis can provide an extremely detailed insight into customer movements and behaviour in the store and more effectively profile them,” says Joana Morgado. “This critical information reveals, aisle by aisle, the behaviours that generate the best sales performance and need to be worked on.”

“We have more than 10,000 potential targets in Europe”

The Axians manager emphasises that this information is extracted with care to ensure the protection of personal data in accordance with the European GDPR (General Data Protection Regulation). “Thanks to sophisticated object tracking, each customer is assigned a unique identifier that maintains their anonymity. These detections are mapped on a 2D representation of the store, ensuring consistency in the projection model and data.”

 

Intuitive interface

The Smart Retail solution can predict each customer’s movement through the store, how long they take to navigate the shelves, and where and in front of which specific product types they stop. “By combining this information with the store’s central sales data, we can calculate conversion rates,” explains Joana Morgado. “All this information is shown in an intuitive interface that allows the user to improve their in-store layout management and also to implement an appropriate pricing strategy.”

While it is still too early to attribute the improved conversion rate in the Portuguese consumer electronics retailer’s pilot store to the implementation of Smart Retail (other factors remain to be taken into account, such as seasonal shifts and communication campaigns), the positive results are encouraging.

 

European ambitions

“We have identified the market potential of smart retailing in Portugal and other European Union markets,” says Joana Morgado. “We are currently targeting the Italian market. Additionally, we are looking at new segments, such as shopping centres, airports, service stations, retail parks and motorway service areas in Portugal. We have more than 10,000 potential targets in Europe, which amount to around 500,000 stores.”

 

09/12/2024