Microsoft introduces new capabilities that help retailers bring AI to the shopper journey and enhance store associate experiences

Retail is one of the most dynamic and competitive industries in the world, where customer expectations and preferences are constantly evolving. A recent McKinsey report confirms the retail sector has experienced as much disruption in the past five years as it has in the previous 25.¹ Perhaps never before in the history of the industry have we seen every single one of retail’s primary stakeholder groups—customers, suppliers, employees, and investors—simultaneously change their behavior and expectations. According to McKinsey, a retailer’s actions in the next two to three years could position it for success in the next 20.¹ In this environment, retailers are turning to the power of generative AI to provide differentiated value across the shopper journey. For example, Walmart announced how they’re using Microsoft’s generative AI technology to build engaging new shopping experiences and provide enhanced productivity to store associates. When the world’s largest retailer decides to make big bets on generative AI, it’s clear the stakes are high and the opportunity to provide value is here.²

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Around the world I’m hearing from retailers who are excited about the potential of AI. The most common question I was asked by retail executives in 2023 was where to start to find the most value. Retailers are looking for ways to begin working with generative AI that will allow them to learn quickly and scale effectively. I’m excited to share new tools that help retailers more easily incorporate AI across the shopper journey. Microsoft has lowered the barriers to building generative AI solutions that improve shopping experiences, support store associates, and enhance retail media campaigns. Through new Microsoft Copilot capabilities in Microsoft products, copilot templates for building applications, and retail data solutions in Microsoft Fabric, Microsoft makes AI implementation more accessible to retailers of all sizes. Retailers can now more easily take the first steps with generative AI.

Let’s look at these new offerings in more detail:

Shopper value

Delight shoppers with more personalized experiences. Retailers can use a copilot template on Azure OpenAI Service to build more individualized shopping experiences across their existing web sites and applications (in public preview).

With applications built using the copilot template, shoppers can engage in helpful and natural conversations that guide them to precisely the goods they need, while saving them time. Generative AI produces experiences that leave shoppers with the confidence they have found the best items. Microsoft Cloud for Retail copilot template pairs the breadth of expressiveness found in a Large Language Model (LLM) with deep knowledge about a retailer’s catalog and expertise. This new approach to commerce comes from advances in generative AI, all built with Responsible AI principles in mind.

Enhance shopping through personalizing marketing with new Copilot capabilities in Microsoft Dynamics 365 Customer Insights (coming soon to public preview).

Our AI-first experience enables marketers to describe the desired marketing outcome in natural language and let generative AI suggest, build, launch, and monitor campaigns in real-time. Transform marketing workflows and improve campaign ROI by uniting business data with Copilot features that deliver outcomes faster and more efficiently. These Copilot capabilities will be available in preview in the first quarter of 2024, with general availability by the third quarter of 2024. Existing Dynamics 365 Customer Insights customers can sign up now for the early access public preview program.

Store associate value

Empower store associates to improve productivity, job satisfaction and customer experiences. Using a copilot template on Azure OpenAI Service, retailers can infuse AI into store operations, better supporting associates (in public preview).

Our copilot template for store operations helps build a generative AI-powered LLM based assistant that enables Q&A from store documentation such as store operating procedures and natural language-based task creation (form filling). Store associates can use natural language to quickly and easily access the information they need in the flow of work, increasing their productivity and efficiency. With this copilot template, retailers can more easily build experiences that enable store employees to quickly get answers to their questions on store operating procedures, HR policies, and benefits. In addition, store associates and managers can save time through natural-language prompt-enabled task creation and assignment.

Using the copilot template, in combination with Microsoft Power Platform and Microsoft Dataverse capabilities, retailers are empowered to seamlessly connect data across multiple lines of business systems to generate AI driven recommendations and actionable solutions that will help store associates make the right decisions.

Consumer brand value

Provide consumer goods brands with tools to auto-generate and edit campaigns with Retail Media Creative Studio (in preview).

Microsoft is introducing generative AI to the Microsoft Retail Media platform (powered by PromoteIQ) through the launch of Retail Media Creative Studio, a comprehensive, end-to-end banner ad creative solution tailored for retail media, available in preview starting in January 2024. With Retail Media Creative Studio, retailers can unlock new revenue with optimized retail media campaigns across multiple retail media channels, such as the retailer’s owned digital properties and across the open web. The solution optimizes banner campaign performance using AI-powered algorithms and delivers a more personalized shopping experience.

The data solutions providing AI value to all

Make the most of retail data to uncover insights that lead to better shopper journeys with retail data solutions in Microsoft Fabric (in public preview).

One of the greatest, if not the greatest, challenges retailers face today is the need to unify data from disparate systems in order to gain insights from it. We are very excited to offer this industry specific set of capabilities in Microsoft Fabric that enables retailers to accelerate time to insight generation by unifying, enriching, and modeling industry data in Fabric. With seamless data harmonization, cross-application analytics, and AI applications, retailers can unlock the full potential of their data and drive their business forward. By using Fabric, retailers can consolidate relevant retail data from multiple systems into a unified, governed hub providing a secure single source of truth for all data and analytics needs. And, with retail data solutions in Fabric, retailers can use the same copy of data without needing to move it from its original source.

Our connector with Sitecore OrderCloud means that data for three important areas: product, customer, and orders, has been mapped to our industry data model, reducing engineering effort and accelerating time to insights.

Across the Microsoft Cloud, retailers now have multiple options when applying AI to key business outcomes across the shopping journey. From building their own solutions to leveraging the copilot templates, Microsoft Cloud for Retail integrates with retailers’ existing systems, seamlessly connecting a retailer’s customers, employees, and data. In each industry, Microsoft builds unique assets to verticalize the Microsoft Cloud and enable a broad partner ecosystem. Built on a foundation of trust and Microsoft’s Responsible AI principles, retailers can safely and securely unlock productivity across their entire business with Microsoft Cloud for Retail.

See it all at NRF 2024 and beyond

According to AI adoption in Retail, the most recent research Microsoft commissioned with The Futurum Group, 87% of retail companies globally have implemented AI in their store operations. Clearly the adoption of AI is increasing as this new technology brings substantive rewards to organizations. Microsoft is here to connect with you, listen to your needs, and support developing your AI strategy. Learn more at the links below and reach out to a Microsoft representative at any time for conversation.

Join us to hear the latest on how Microsoft is helping customers by attending our sessions at NRF 2024 or listening on-demand after the event:

Retail Unlocked: Achieve more with Microsoft: Hosted by Shelley Bransten, Corporate Vice President, Global Retail, Consumer Goods and Gaming industries, Microsoft. Sunday, January 14, 2024, from 1:00 PM to 1:30 PM Eastern Time.

Join this interactive session to hear about one retailer’s AI journey to date. Hosted by Microsoft’s Corporate Vice President, Retail, Consumer Goods & Gaming industries, Shelley Bransten, you’ll also learn about new AI-focused findings from Futurum Research and all new AI capabilities in Microsoft Cloud for Retail that will help power your AI transformation.

Unlocking true customer-centricity: Optimizing touchpoints across the shopper journey with AI: Hosted by Kathleen Mitford, Corporate Vice President, Global Industry Marketing. Monday, January 15, 2024, from 11:45 AM to 12:15 PM Eastern Time.

Generative AI and large language models have captured the attention of executives across industries. While the technology’s use cases seem endless, smart retailers and brands must identify and prioritize the applications of generative AI that will be most valuable to their organization and partner with organizations who will treat their data with the highest privacy standards. Join us to hear how Microsoft is helping organizations large and small maximize their generative AI opportunities safely and responsibly.

Unify your data to unlock AI opportunities: Hosted by Martin Kostal, General Manager, Microsoft Industry Clouds. Tuesday, January 16, 2024, from 1:00 PM to 1:45 PM Eastern Time.

Retailers are swimming in data all day. Even with sophisticated legacy technologies and cutting-edge data science, the majority of that data goes uncollected. Insights stay hidden—often in plain sight. But that’s starting to change. AI tools are enabling retailers to understand their customers, merchandising, supply chains, operations, and workforces better than ever before. Join us to hear about the myriad insights that retailers are drawing from newfound and increasingly precise data sources to run leaner, smarter stores.  