walmart

Walmart’s Facial Recognition Technology Aims to Minimize Customer Churn

by Jenna Sindle

Believe it or not, there is yet another way for artificial intelligence (AI) to be applied to the shopping experience. We have already discussed AI’s ability to assist retailers in understanding, in some cases predicting, a customer’s transactional behavior as well as AI’s role in the re-emergence of direct mail marketing tactics. But what about AI’s ability to understand a consumer on an emotional level?

A recent article by Hayley Peterson at Business Insider explored Walmart’s efforts to better understand their customer’s shopping experience through the use of facial recognition technology. The retail giant filed a patent application for the technology back in 2012 according to Forbes and applied it to some stores in 2015 as a tool to fight theft. Now the technology is being reapplied through the customer journey lens.

Essentially, as customers queue to check out, the facial recognition technology scans their faces to determine their current emotional state and correlate that with their shopping experience and, if needed, prompt a Walmart employee to approach them and resolve the issue at hand. The goal behind utilizing such technology is to minimize customer churn and address potentially disgruntled customers’ concerns before their business is lost.

This technology can also be applied as a tool to help better understand shopping patterns over time and how or if those patterns are associated with an emotional state of the customer. It can identify not only changes in items purchased, but also the size of purchases – something that might indicate a potentially fleeting customer.

It’s important to also address it’s usefulness as a shoplifting prevention tactic, especially considering Walmart loses around $3 billion per year in theft. There are known facial cues and body language are indicative of lying or stealing, so it’s something that can be used to improve the bottom line as a whole.

Of course, many retail experts understandably vocalize their privacy concerns with the technology and the actual application of it seems unclear to some. Several have warned Walmart to tread cautiously. This is a hurdle that faces many companies looking to apply artificial intelligence technologies to their models and should be treated with care.

The ability to resolve any customer dissatisfaction before losing them is extremely powerful, especially because acquiring new customers is infamously more difficult than retaining existing ones. Once technology like this can be perfected with privacy concerns accounted for, a retailer’s ability to anticipate a customer’s needs only becomes stronger and the customer experience becomes more enjoyable.

If you’re interested in learning more about data aggregation and how it can be applied to create a better customer journey, check out the Pitney Bowes whitepaper entitled, “Employing a Single Customer View