Artificial intelligence (AI) and machine learning are becoming more than just buzzwords as South African blue-chip companies start to implement these technologies to solve real-world problems.
One of South Africa’s largest retail groups recently contracted Xineoh, a Johannesburg-based company which uses AI to predict consumer behaviour, to assist with the optimisation of its inventory.
South African retailers increasingly look at ways to use their data to boost sales and operate more efficiently.
Xineoh’s AI algorithm utilises retailers’ raw transaction data to predict who will buy which product at what price. It provides retail clients with the ability to optimise their pricing, inventory management and marketing.
While most retailers already use past sales data to determine which products to stock, there are myriad other factors that could influence future sales, including product specification, local weather, store location and social media trends.
Human brains cannot process all these variables to make accurate predictions. There is a tendency to focus on the most popular products, whereby retailers wrongly assume each person is the average of the collective.
By opting to stock their outlets with the most relevant products, which takes into account the nuances of each shopper’s buying behaviour, retailers can squeeze out a considerable amount of extra revenue.
With AI-powered decision-making, Xineoh will help its new retail client manage its inventory more efficiently. Too much stock is a drag on the balance sheet while too little might result in missed sales.
Human assumptions of how fast products will sell often don’t consider all the data. For instance, a product that flies off the shelves in George, might struggle in a similar-sized store in Pietermaritzburg.
The reasons for such discrepancies might not be obvious but AI algorithms can predict it.
Xineoh, founded in 2014, has raised over $3,5-million in offshore venture capital from several heavyweight investors, including Wade Flemons, a seasoned investment banker, private equity managing director and entrepreneur from Canada.
“Xineoh has in the past proven that a South African start-up can get a cutting-edge AI product funded and built. We have now proven we can get it sold and deployed. We are, as a consequence, starting to attract more and more heavy hitters to our team,” says Vian Chinner, CEO of Xineoh.
To further accelerate the company’s growth, Xineoh recently appointed a seasoned AI product and sales executive, Herman Scheepers, as chief product officer. Scheepers is responsible for all aspects of Xineoh’s products – including strategy, design, development and marketing – and influences the deployment of the Xineoh solution suite.
Prior to joining Xineoh, Scheepers spearheaded business development and sales in the analytics and AI space at Nextec, formerly EOH.
“There has been a considerable amount of research done in AI over the last 10 years. Although the industry has been associated with a lot of hype, we are now entering a commercialisation and mass adoption phase. Organisations are ready to invest in solutions that solve real problems and Xineoh is well-positioned to benefit from this. Xineoh is a great company to work for, with terrific people and a compelling, unique solution suite,” Scheepers comments.