US e-commerce giant Amazon may have just made cashiers redundant by opening its artificial intelligence powered checkout-free grocery store in its hometown Seattle in January, but on the other side of the Pacific an experiment conducted by Chinese search engine Baidu could make management in supermarkets and convenience stores worry about their own job prospects.
The ability to accurately predict consumption patterns of perishable food products on rainy work days in say, the central business district of China’s Wuhan city, is something only experienced store managers can do, but that may soon be an obsolete skill thanks to an AI-powered algorithm developed by Baidu, the operator of China’s largest online search engine.
With historical data from 70 metrics including store food purchases, sales, the weather and festivals, Beijing-based Baidu said it has developed a model that can predict store sales for the next day as a reference for the store manager to decide on the quantity of food products, such as rice boxes and sandwiches, needed to meet the customer demands without creating excess waste.
Amazon is using AI and camera technology to provide customers with a “grab and go” shopping experience at its futuristic grocery store Amazon Go. Shoppers just choose their items and leave, with the cost automatically charged to their Amazon account after they leave the store. In China, the country’s two top e-commerce players Alibaba Group Holding and JD.com offer similar retail experiences.
In a recent 10-day trial conducted at 10 convenience stores around China, Baidu’s technology was able to help the stores’ average profit increased by about 20 per cent and reduced waste by 30 per cent.
“We expect to bring the technology to about 200 stores in central China’s Wuhan city in 2018 through our partnership with convenience store chain Today,” said Liu Yongfeng, senior project manager of Baidu’s deep learning platform, who is in charge of the project.
“The more data we can gather, the higher the accuracy we can achieve,” Liu said.
The move by Baidu comes amid a rising global trend of retailers and tech companies adopting AI, blurring the lines between online and offline retail to deliver a better shopping experience and boost sales performance.
A growing number of Chinese start-ups, such as Bingo Box, have jumped onto the bandwagon, setting up unmanned stores powered by mobile payments and supported by an array of advanced technologies including facial and voice recognition.
Rather than focus on the customer experience, Baidu’s fresh food prediction technology is likely to help solve an industry-wide challenge, according to Wen Ying, branding director of Today Convenience.
“Time is money in the fresh food business. We have to throw away all food not sold within 24 hours. For now, the demand prediction is all based on human experience,” said Wen.
“But the employee turnover rate is rather high in our line of business. More often than not, an experienced store manager leaves without passing on his or her knowledge to their successor. With the technology offered by Baidu, we can make sure our store managers order the right quantity of rice boxes even when they don’t have enough experience,” she said.