This is an introductory session about the role that Machine Learning is playing in the retail sector and how it is being deployed across the different areas of this industry.
Speaker: Atakan Cetinsoy, VP of Predictive Applications at BigML.
*ML in Retail 2021: Webinar.
Machine Learning in Retail: ML in the Retail Sector
1. Atakan Cetinsoy
VP of Predictive Applications
Machine Learning in Retail
Nov 3, 2021
Intelligent Mobility
2. BigML,Inc
Machine Learning in Retail
2
Omnichannel Automation
Personalization
Retail Industry Megatrends
x2 Speed Post Pandemic
3. BigML,Inc
3
Retail ML Business Impact
CRITICAL SUCCESS FACTORS
*SOURCE: NRF
Real-time
Insights
Better
Efficiency
Task
Automation
Improved
Decisions
Anticipating Needs
Increased
Security
BUSINESS PERFORMANCE
ML
Operational Expenditure
7%
Annual Revenue
10%
Machine Learning in Retail
4. BigML,Inc
STORE
OPERATIONS
PURCHASING
INVENTORY
MANAGEMENT
DISTRBUTION
& LOGISTICS
SALES &
MARKETING
Retail ML Use Cases
• Assortment
Planning
• Forecasting
• Automated
Reconciliation
4
• Replenishment
Optimization
• Dynamic Pricing
• Markdowns
• Same Day
Delivery
• Route
Optimization
• Smart Packaging
• Returns
Management
• POS Automation
• Security & Fraud
• Loyalty &
Promotions
• Cross Sell & Up
• Recommendations
Machine Learning in Retail
5. BigML,Inc
5
Problem Statement Examples
CLASSIFICATION
REGRESSION
TIME SERIES FORECASTING
CLUSTER ANALYSIS
ANOMALY DETECTION
ASSOCIATION DISCOVERY
Should these fresh produce be marked down?
What will this customer’s LTV will be?
How many cases of this wine will sell next month?
Are these customers similar?
Is the product review real or fake?
What are the necessary conditions to ensure high NPSs?
Machine Learning in Retail
6. BigML,Inc
6
Retail ML Adoption by Function
0%
22,5%
45%
67,5%
90%
Supply Chain Planning Distribution & Logistics Customer Experience Store Operations
41%
41%
43%
49%
33%
29%
27%
36%
Actual (2019) Planned (2021)
Machine Learning in Retail
*SOURCE: NRF
7. BigML,Inc
Machine Learning in Retail
7
Companies with 5+ Machine Learning applications in production choose to license
commercial solutions at an even higher rate than ML Newbies.
Enhancing Existing Products and Services
Creating NEW Products and Revenue Streams
Top Objectives of AI/ML Initiatives
ML Platform — Build or Buy?
* SOURCE: Deloitte Insights, State of AI in the Enterprise, 3rd Edition, 2020
Lowering Costs | Making Processes More Efficient
8. BigML,Inc
8
Real-life Example Use Case
Machine Learning in Retail
*SOURCE: https://blog.bigml.com/2020/07/15/machine-learning-fights-cannibalization-in-the-retail-industry/
9. BigML,Inc
Machine Learning in Retail
9
WORKFLOWS
DATA SOURCES
ALERTS
BIGML PLATFORM
Machine Learning platforms
provide a strong foundational
layer by packaging the best
algorithms, workflows, scripts in
an easily consumable manner
Thus, allowing Customers to
scale thousands of models
across a multitude of predictive
use cases.
End users interface with easy-
to-digest alerts, dashboards
and recommendations.
SOURCE
SERVER
DATASET
SERVER
MODEL
SERVER
PREDICTION
SERVER
EVALUATION
SERVER
SAMPLE
SERVER
WHIZZML
SERVER
R e p e a t a b l e a n d
programmable workflows
handle individual use cases in a
Connectors for multiple data
sources make it easy to
integrate ML platforms with
client IT systems.
Building Scalable Predictive Apps
Faster time to market Minimized technical risk
Ability to focus on business
use cases — not infrastructure
10. BigML,Inc
10
Key Takeaways
• Successful Machine Learning applications in retail are not about
replacing personnel but supporting decision making. Frontline
employee participation is critical to achieve operational agility.
• There are some great examples from early adopters pushing the
envelope but Machine Learning adoption in retail is far from saturation.
• Think big but start small. Done right, smart applications can be a
significant competitive differentiators.
• Machine Learning platforms can help the next wave of adopters
accelerate their initiatives by helping them concentrate on solving
business problems instead of building infrastructure.
Machine Learning in Retail