Microsoft Unveils Gen AI and Data Solutions, Offering Copilot Experiences Through Microsoft Cloud for Retail

Generative AI solutions help retailers and brands infuse personalization and creativity into marketing campaigns and retail media ad campaigns to capture customer interest and drive revenue opportunities.

Ahead of NRF 2024: Retail’s Big Show, Microsoft Corp. on Thursday announced new generative AI and data solutions and capabilities for retailers that span the retail shopper journey, from enabling personalized shopping experiences, empowering store associates, and unlocking and unifying retail data to helping brands more effectively reach their audiences. Through new copilot templates on Azure OpenAI Service that allow retailers to build personalized shopping experiences and support store operations, the introduction of retail data solutions in Microsoft Fabric, new copilot features in Microsoft Dynamics 365 Customer Insights, and the launch of Retail Media Creative Studio in the Microsoft Retail Media Platform, Microsoft Cloud for Retail now offers more options for retailers to choose from to infuse copilot experiences throughout the shopper journey.

Retailers globally continue to face challenges across their business — from high store associate turnover to shifting shopping habits, including the continued rise in omnichannel shopping and a decrease in brand loyalty among consumers, to the growth in siloed data that often holds unrealized value. To address these challenges, retailers are turning to technology and, in the era of AI, they have an opportunity to accelerate its impact with data-backed generative AI solutions to help unlock personalized shopping experiences, enhance store associates’ performance and productivity, and uncover insights that ultimately lead to better customer engagement and satisfaction. According to a Microsoft-commissioned study through IDC, retail organizations are realizing a return on their AI investments within 14 months.¹ Retailers are also seeing an average return of $3.45 for every $1 they invest in AI.

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Creating memorable and personalized customer experiences with AI

Seventy-one percent of consumers expect companies to deliver personalized interactions, and shoppers with a highly personalized experience are about twice as likely to add items to their baskets as shoppers without a personalized experience. In an online shopping environment, the tools available to allow shoppers to discover products, provide tailored recommendations and fulfill their shopping needs can be limited, leading to a less than ideal experience. To address this gap, Microsoft Cloud for Retail now offers a copilot template, in preview, that lets retailers build personalized shopping experiences. Using a retailer’s current systems and data, this prebuilt option can be embedded into existing digital experiences, such as a website or app, making it easier for shoppers to find and purchase the products they want.

Now, shoppers can benefit from the convenience of online shopping with the experience offered by a personal shopper, just as they would if they were shopping in a physical store. The copilot template allows retailers to build personalized shopping that enable customers to ask for and view products by expressing what they’re looking for through natural language. Powered by GPT-4 through Azure OpenAI Service, the technology uses contextual awareness to provide the type of response shoppers would receive from a store associate. For example, a first-time camper shopping for a camping trip to Yosemite National Park in early March can visit a sporting goods retailer’s website and state in the chat “I’m going camping in Yosemite this March, and I have never camped before. Help me find the right gear.” Shoppers receive a response in natural language with recommendations for essentials. The copilot template for personalized shopping can also surface complementary items to increase basket size and customer satisfaction.

“Generative AI can serve as a key differentiator for retailers, providing their customers with a unique and memorable experience that embodies their brand identity,” said Shelley Bransten, corporate vice president, Global Retail, Consumer Goods & Gaming Industries. “The new Microsoft Cloud for Retail copilot template for personalized shopping on Azure OpenAI Service is just one of the ways we enable retailers to build copilot experiences. We are committed to democratizing the concierge-like experience across the shopping journey through copilot templates that help retailers create more personalized experiences and reduce time to value.”

Innovative retailers, such as Canadian Tire Corp. (CTC), are building copilots into the shopping experience to bring additional value to their business and personalize interactions with their customers. Later this spring, CTC is launching an AI shopping assistant, powered by Azure OpenAI Service, to support customers in purchasing certain automotive products. Through generative AI, shoppers can get a better understanding of product options, making the most of their time before and during their in-store visit.

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Empowering store associates with AI tools to improve productivity, job satisfaction and customer experiences

Store associates are critical to a retailer’s success, but the industry continues to face challenges with workforce shortages. Although technology can create transformative impact for retail workers, oftentimes getting it into the hands of store associates can be challenging. Microsoft’s Work Trend Index found that 60% of retail frontline workers are excited about the new opportunities that digital tools bring to retail, but 34% feel they don’t have the right digital tools or tech to do their job effectively.

Microsoft is putting generative AI into the hands of store associates and managers, unlocking their potential and contributing to productivity, job satisfaction and, ultimately, customers’ shopping experiences. Microsoft Cloud for Retail now provides a copilot template, in preview, on Azure OpenAI Service, that helps retailers build solutions to support store operations, giving store associates and managers access to insights and information in the flow of work. By accessing the technology on the retailer’s mobile devices, tablets or PCs, store associates and managers can use natural language to get answers to questions on store procedures, product catalogs, HR policies and benefits in an efficient and quick way using AI. They can also save time through voice-enabled task creation and assignments, as well as quickly access customer and product information to help them provide quality in-store customer service.

Applications built with the copilot template can also give store leaders a view into employees’ and customers’ most frequently asked questions, allowing them to gain insights that help them take meaningful actions, such as updating training, procedures or guidelines.

Microsoft Experience Centers, with physical store locations in New York City, Sydney and London that offer shoppers the ability to experience Microsoft products and make retail purchases, will be one of the first retailers to implement copilot template for store associates. The technology will give their store associates valuable insights to further enhance shoppers’ experiences as they browse products, see demos and learn about Microsoft technology.

Unlocking insights by unifying retail data and applying AI

The retail industry generates 40 petabytes of data every hour. To put it into perspective, that’s equivalent to 8 million two-hour long movies, which would require about 1,500 years to binge watch. What’s even more surprising is that because data remains siloed, most retailers leverage only a fraction of that data, providing them and their customers with incomplete insights. To derive actionable insights from their data to make the most of AI, seamless integration and standardized data is needed across different systems and applications.

Today, Microsoft is announcing the preview of new retail data solutions in Microsoft Fabric, an end-to-end, unified analytics platform that brings together all the data and analytics tools that organizations need to unlock the potential of their data and lay the foundation for the era of AI.

Microsoft Fabric gives retailers:

• A data model that allows them to plan, architect and design data solutions. This retail industry data model (generally available) can be used for data governance, reporting, business intelligence and advanced analytics.
• A data connector to bring their e-commerce data from Sitecore OrderCloud (preview) into Microsoft Fabric in real time. Under this unified lens, retailers can access insights and tools to proactively improve customer satisfaction and business operations at every touchpoint from storefront to fulfillment.
• Analytics templates, such as frequently bought together (preview), which provides actionable, data-driven recommendations to help retailers improve product upselling and shelf optimization.

With the retail data solutions in Microsoft Fabric, organizations can accelerate implementation of retail-specific data models while unifying their data and transforming it into predictive insights that help enhance customer engagement and shopper experiences.

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Infusing generative AI to help retailers and brands deliver successful marketing campaigns and retail media ad campaigns

Microsoft is announcing new Copilot features in Dynamics 365 Customer Insights that will help marketers build end-to-end projects and campaigns. These new features offer marketing teams an AI-first experience to kickstart projects by simply typing in their desired outcome in their own words or by uploading an existing creative brief. Copilot then responds by generating a centralized project board, allowing marketers to manage and update their campaign workflows in one place and get AI-recommended content that can be easily changed — eliminating the need for siloed applications and saving time. Customers will also have access to Typeface and its enterprise-grade generative AI capabilities to help produce brand-authentic images across assets, supercharging personalized content for greater impact — all from within Dynamics 365 Customer Insights. Additionally, Typeface helps align content to the organization’s brand kit, including themes, fonts and product images — all extracted from a central asset library. These new Copilot features in Dynamics 365 Customer Insights will be available for early access public preview in the first quarter of 2024.

Additionally, 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 empower their advertisers to quickly auto-generate and edit banner creatives by using generative AI. Retailers can then review and approve for use 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. Retail Media Creative Studio provides more creativity, productivity and revenue opportunities for retailers and advertisers to accelerate the growth of their retail media business.

Across industries, Microsoft builds unique assets to verticalize the Microsoft Cloud and enable the ecosystem. Through the Microsoft Cloud, retailers can take a tailored approach to bring copilot experiences into the shopper journey. Built on a foundation of trust and Microsoft’s Responsible AI principles, retailers can safely and securely unlock their ability to deliver meaningful shopping experiences and empower every employee to provide exceptional service that turns repeat customers into loyal fans.

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

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