How can machine learning benefit the retail industry?

Machine learning, a type of artificial intelligence powered by large-scale data that provides computers with the ability to learn without being explicitly programmed, will change the face of retail over the next few years. Managing director of Dunnhumby SA, Graeme Tulloch comments, "Through new data science techniques and increases in available data, the company is now using machine learning to assist retailers in predicting the future, by simulating scenarios that forecast outcomes and pinpoint critical action areas within an enormous amount of possibilities. "Most retailers are already forecasting to some extent. When a product goes on promotion, they have an idea of the amount of extra product they might expect to sell, however, a large percentage of the promotions are not profitable, so predicting with accuracy the performance of the promotions using advanced machine learning (to replace simple linear regression) is critical. Improving predictability helps ensure promotions will deliver great ROI and optimises the ordering inventory to ensure stock is available in store to avoid customer dissatisfaction."