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How Kinect and analytics could boost sales in bricks-and-mortar stores

Pier One is also looking at Azure ML to understand what customers are likely to buy next. They picked some typical customers who bought a few things at the same time (not just one product and not more than eight) and analysed the data with a standard machine learning algorithm called a decision forest, and with a new algorithm from MSR UK called a decision jungle (that combines a lot of decision trees), which was more accurate.

The drag and drop Azure ML makes that kind of experimentation easy to do, plus you can publish the model as a web service that you can analyse in Excel with tools like Power View. "Now I can manage my stock more effectively. I can see what products are most interesting to my loyal customers," says Kelly.

Mobile apps could use the same web service to give recommendations. That could be a loyalty app that suggests products to customers, or it could be an app for sales staff to use when they're helping customers in store that notifies them if a customer is walking back and forth, so they're probably trying to find something – and suggests other products to mention after they've found it.

With the loyalty app, Kelly says: "When I walk into the store, the model can predict that I'm interested in beer mugs, cocktail glasses and pillows, and show me a store map of where they are on the shelf. That's machine learning models running in the cloud driving an experience that's personalised for me on the phone, backed up by a pretty rigorous business process."

Creep factor?

Will customers find that kind of tracking creepy? Kelly believes they won't if it's done responsibly and sticks to useful suggestions. "I can't count how many times I've been to the DIY store twice in one day, because I didn't get everything and I had to go back for one part. If the app tells me 'people who buy this pipe and this valve also need this wrench to fit them; do you have one?' That's really useful."

Putting sensors in stores isn't cheap, but it's an alternative to effectively cutting prices. "The way Pier One thinks is 'I want to recommend a product I think you're going to love without having to discount it'. Right now the retail industry is in this conundrum where everything has to be discounted because that's the call to action – get it cheap. Can I have a call to action that's 'check out this great product, this rug, this chair?' Can I get you excited about the product? Let me show you the latest things you find interesting."