Two of the world’s most influential physical retail and e-commerce companies are investing in large-scale artificial intelligence solutions for retail.
Fung Retailing Limited and JD.com, China’s largest retailer, are pooling resources to form an AI Boundaryless Retail Center. By combining their respective expertise in offline retailing and online commerce, Fung Retailing and JD.com have set their sights on creating a “new retail format” for China and the larger Asian market.
That new format aims to bring together best-of-breed solutions and approaches that enhance the customer’s physical shopping experience. That could mean stores without human employees, virtual fitting driven by artificial intelligence so shoppers can skip physically slipping into and out of clothing if they choose, and intelligent shopping assistants, like chatbots, for example, to aid with selecting the right items, offering rich product information and matching shoppers with products based on personalized customer history.
“When it comes to the future of retail, and driving the customer experience,” Fung Retailing Limited’s group managing director Sabrina Fung said in a statement, “AI is an essential component.”
On the back end, JD.com and Fung Retailing Limited envision a system that leverages AI to merge online and offline in a frictionless experience, creating an end-to-end platform to manage all components of the retail journey from product and price information to storage, order and payment.
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They’ll also develop “AI infrastructure” but there’s no word yet on what exactly that entails. Further, the center will investigate how the worlds of both fashion and artificial intelligence intersect.
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The partnership represents a significant step forward for the application of artificial intelligence to fashion retailing. While the industry has yielded notable AI innovations like the rise of chatbots to improve customer service, for example, most developments to date have been one-off point solutions rather than a holistic AI “platform” approach akin to what Fung Retailing and JD.com are developing.
Artificial intelligence holds the potential to transform not just industries but also economic landscapes. Advancements and applications in AI could contribute $15.7 trillion to the global economy by 2030, according to PwC’s “Global Artificial Intelligence Study: Exploiting the AI Revolution” report. What’s more, the report reveals that China stands to reap the greatest economic gains from artificial intelligence, as much as a 26 percent bump in gross domestic product in the next 12 years.
In recent years many new technologies such as in-store WiFi and mobile applications quickly have become “table stakes” for retailers, and JD.com sees AI as yet another tech advancement that will become a must-have staple of retailing.
“As one of the largest retailers in the world, we believe that figuring out how to deploy AI solutions is critical to our future success,” Bowen Zhou, vice president of JD.com and head of JD’s AI Platform and Research, said in a statement. “Drawing on Fung Retailing’s global offline retail expertise, this partnership will be important for us as we deliver our retail vision.”