How AI and algorithms are shaping retail

In today's rapidly evolving retail landscape, data has emerged as the cornerstone of innovation, propelling the industry forward into a new era fueled by algorithms and predictive analytics. The recent Cooler Screens Innovation Summit brought together top minds in retail data to delve into the significance of high-quality, scalable data in unlocking the full potential of AI solutions, particularly in enhancing in-store experiences.

Here are some key takeaways from the session titled "Fueling the New Machine: Algorithms + Data," featuring industry leaders Andy Hill, Global Chief Data Officer, Unilever; Nishat Mehta, COO and President of Lexitas; and Cara Pratt, Senior Vice President of Kroger Precision Marketing.

1. Crafting stories and experiences with data

The session kicked off by emphasizing the transformative power of data in crafting personalized stories, experiences, and connections that resonate with each customer. With AI relying heavily on data as its fuel, the focus shifted towards leveraging contextual data rather than personal information to drive outcomes and enhance the in-store experience.

2. The evolution of retail media

Cara Pratt shed light on the evolution of retail media and its pivotal role in driving business growth.

“A lot of people think retail media is focused in on lower-funnel performance marketing and it's been fascinating to change that conversation,” she said. “Retail media is media. It's influencing full funnel for the retailers that have the right density, efficacy, and the appropriate utility of that data.”

Pratt highlighted the convergence of market-driven changes, consumer expectations, and privacy considerations, stressing the importance of creating value exchanges with customers to build trust and nurture relationships.

3. Data-driven insights for personalization

Both Cara Pratt and Nishat Mehta emphasized the critical role of data in driving retail media performance and enhancing customer experiences.

“Data is the lifeblood for highly performant organizations to drive business impact at the end of the day,” Pratt said. “We have thousands of data points and touchpoints to help us understand behavior over time and make the shopping experience better.”

They discussed the importance of leveraging first-party data, which boasts a remarkable 90% accuracy in predictive modeling, compared to just 30% for third-party data. This underscores the significance of personalized advertising and targeted marketing strategies in driving conversion and brand loyalty.

4. Enhancing in-store experiences with technology

The panelists highlighted the importance of partnerships and technological advancements in redefining the in-store experience. Cara Pratt shared insights into Kroger's partnership with Cooler Screens, which aims to modernize the store environment through digital screens and customized content. By leveraging data-driven insights, retailers can create tailored experiences that drive engagement and inspire purchasing decisions.

5. Empowering retailers with data science

Mehta emphasized the transformative potential of AI and machine learning in retail operations, particularly in generating actionable insights from vast amounts of data. He highlighted notable examples of using machine learning algorithms to understand consumer behavior, optimize product assortments, and drive operational efficiency.

6. Future trends and innovations

The session concluded with a glimpse into the future of retail, where data-driven insights and AI-powered solutions will continue to play a central role in shaping customer experiences and driving business growth. From self-serve ad platforms to predictive analytics, retailers are poised to leverage technology to deliver seamless, personalized experiences that drive engagement and loyalty.

“What I'm most excited about is the fact that we can observe our new in-house ad platform’s impact from a performance standpoint,” Pratt said. “We're seeing double-digit growth and return on ad spend. This is how we unleash our sciences in the most productive, performant way.”

The session underscored the pivotal role of data in fueling innovation and driving business success in the retail industry. By harnessing the power of algorithms, predictive analytics, and data-driven insights, retailers can unlock new opportunities for growth, enhance customer experiences, and stay ahead in today's dynamic marketplace.

Watch the full session video here.