With artificial intelligence on the rise, ESM chats to Minna Vakkilainen of Finland’s K Group about the efforts that the retailer has made to ensure that its use of AI is guided by ethical principles. This article first appeared in ESM Issue 1 2019.
Artificial intelligence is becoming an intrinsic part of modern retail, but while the technology gains apace, due consideration needs to be given to the long-term benefits of AI adoption.
For example, what impact could artificial intelligence have on the workforce, on customer relations, or in-store planning – all areas that are traditionally human led?
Enter Finnish retailer K Group, which last year outlined a number of ‘ethical principles’ governing its use of AI. These will influence its strategic choices when it comes to future development of the technology.
The retailer has integrated AI into several of its customer-facing solutions. Marketing is increasingly tailored to a shopper’s specific needs – for example, with the group’s websites presenting bespoke products that a typical customer frequently buys.
This degree of ‘individualisation’ of the shopping experience is elevated by AI technology.
The Human Touch
At the same time, a human touch is required to ensure that customer trust is maintained.
K Group makes efforts to inform its customers how and where data about their shopping habits is used on its AI platforms. Products such as alcohol and tobacco are excluded from data utilised by AI solutions, in order to enable shoppers to make healthy choices, and as AI technology is advancing so rapidly, K Group is continuously updating its principles and operating methods, ensuring that its customers are kept up to date with changing developments.
It’s an approach that requires extra effort, but it’s paying off, says Minna Vakkilainen, K Group VP in charge of customer data and analytics.
“As the biggest trading sector company in Finland, we know our responsibility,” Vakkilainen explains. “K Group wants to be a company worthy of its customers’ trust. As the role of AI is growing, we have integrated it as a part of our operational models, processes, and responsibility work.”
K Group is currently trialling an AI solution among its personnel, MealLogger, which encourages staff members to take a photo of each meal that they have, every day, which is then assessed using AI technology, with hints and tips provided on how to make small changes in order to eat healthily.
Solutions like these, Vakkilainen says, offer an example of how AI can make a difference to customers’ everyday lives.
Boosting Online Sales
K Group’s adoption of AI into its e-commerce platforms has helped boost the retailer’s online sales, which, in November 2018, were 100% higher than in the same period the previous year. Vakkilainen believes that AI is “absolutely a necessary tool” in driving online food sales, as it can create “excellence and [a] personal experience” for shoppers.
“AI solutions play an important role in creating and improving the digital customer experience,” she says. “They also have an essential part in the operations of online stores, e.g. in collecting the products more efficiently and improving logistics.”
That said, the retailer is also cognisant that not all customers want to avail of such personalised solutions – a factor that needs to be taken into account when developing new platforms.
“Data is important to companies, and its importance will only increase going forward,” she adds. “That is why it’s vital that we maintain our customers’ trust. Trust takes years to build, seconds to break, and years to repair. That is why we take trust to our heart.”
Customer Focus
As to fears that increased reliance on AI will render some human tasks redundant in the future, Vakkilainen is optimistic that the future, AI-infused retail environment will be more attuned to customers’ needs, with personnel more attuned to developing the customer experience.
“In the future,” she says, “the retailer that successfully connects human encounters in the stores with advanced digital services powered by AI will prevail.”
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
