Fernando Jorge

The Secret Life of your Shampoo Part 2: AI in Retail

Blog Post created by Fernando Jorge Advocate on Jul 18, 2017

Several thousand decisions have already been made by the time shampoo is bottled, but at that point, it’s only half way to your cart. The role of artificial intelligence continues to affect the path the product takes from its origin all the way to your shower. In our journey through the secret life of your shampoo so far (you can get up to speed with my last blog), we already covered just how many decisions go into establishing the chemical mixture and transporting said chemicals to safely create the product you use to wash your hair. In fact, so many decisions must be made in compliance with so many rules that companies use business rules software to streamline the process and ensure efficiency and consistency.

 

Once the chemical mixture is established and all ingredients are safely transferred and mixed, it’s time to start production. Have you ever wondered how companies decide what to write on product packaging? There are laws dictating what must be printed on product labels in different countries. In Canada, brands must implement Bilingual Packaging, meaning labels have to be printed in both French and English. While packages sold in Canada must abide by this law, companies are not obliged to do the same for packages sold just across the border in the US. To comply with varying legislation, companies use automated rules software to analyze protocols and determine the text they print on your shampoo bottle versus the bottle of your (distant) neighbor.

 

shampoo2 1.png

Canadian products must comply with Bilingual Packaging laws—requiring a different label than in the US

 

With the packaging sorted, it’s time to go to market. The shelves of a big box store are competitive territory. The average height of a woman in the United States is 5’4”, and prime shelf real estate is eye level. Since stores have multiple shelves in multiple aisles in multiple sections, important decisions must be made about product placement. Retailers need to ensure maximum profit, and to that effort, they produce planograms to design and model the placement of products on their shelves. The creation of a planogram is far from arbitrary. Retailers can use a combination of FICO business rules software, analytics, and optimization tools to plan the finest placement of each and every product, including your shampoo. The fact that the bottle is on the second shelf to the left, ideal placement to catch your eye the first time and make it easy to find every subsequent trip, is no coincidence. That location was determined through a long process of data analytics that informs carefully weighted business decisions about product placement throughout the entire store.

 

shampoo2 2.png

Product placement is not random. Stores use analytics to produce planograms.

 

When you strolled down the hair care aisle and grabbed that bottle of shampoo, you made one decision. While that choice was your own, the entire process that got you to this point was informed by a chain of business decisions largely informed by artificial intelligence. Tools from FICO’s Decision Management Suite work in the background using AI to empower experts to act rapidly by eliminating the need for middlemen, thereby providing a more productive and efficient path to your cart. Every brand wants to make it a ‘no-brainer’ for a consumer to choose their product – but before you make that seemingly mindless decision to buy, countless decisions were made to create the product, curate the experience, and ultimately lead you to buy a bottle of shampoo.

 

by Fernando Donati Jorge and Makenna Breitenfeld

Outcomes