industryopinion
Real-world AI: hot tech trend drives new efficiencies in the retail property sector
Vijay Anand, VP of artificial intelligence at MRI Software discusses the use of AI in proptech.
B
y now, we’ve all seen the headlines about ChatGPT and the plethora of generative artificial intelligence (AI) solutions rushing to market in recent months. It has brought home the
fact that AI is no longer the futuristic concept we see in the movies but a very real technology being used to achieve practical solutions to everyday business challenges – boosting efficiency and saving money in the process. It is worth noting, however, that draſting written text for business
letters, instant blogs and school essays is not the only AI game in town. Companies in the retail sector with extensive lease and property portfolios have been deploying AI-driven PropTech solutions to deal with specific real estate challenges for at least five years – and making what once seemed the impossible very doable. At its core, AI makes tasks that previously took days, weeks, or even
months possible in just hours or, in many cases, minutes. Te result provides organisations with the ability to quickly glean insights from masses of complex and oſten convoluted data sets to inform business decisions and strategic predictions in a matter of a few clicks.
Real help for real people For many organisations operating in the retail real estate sector, manual ‘lease abstraction’ – extracting and making sense of large amounts of data from multiple, sometimes hundreds or even thousands, of leases – has been one of the most costly and complicated challenges they have faced. Companies that have deployed AI-enabled contract intelligence
solutions to scan documents and organise data have been able to quickly garner and evaluate information from hundreds of contracts that are oſten hundreds of pages long to better understand their rights, responsibilities, and options. Many retailers and landlords have sought to leverage AI in conjunction with lease accounting and other solutions to ensure they keep in line with the new, strict IFRS 16 global accounting standards.
Looking at the patterns AI-driven soſtware enabling footfall analysis in retail sites has become another sophisticated tool for companies with brick-and-mortar holdings or operations. By compiling and analysing data from sensors and cameras, landlords and retailers get a clearer picture of the state of play in shops, high streets, and other retail spaces. Retail players can
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generate analysis on how customers move around stores and shopping centres, where they go, how long they stay, what they are drawn to, and where they dwell – and the AI can even yield information on the demographics of the consumers being tracked. Tis high level of detailed customer information then feeds into the
business decisions made by both commercial landlords and retailers, helping them understand how they can optimise store layouts, onsite promotions, staff allocation, inventory, restocking, opening hours and other critical aspects of their operations. Tis type of footfall data can also be studied to determine how
many people are coming to shop on particular days, during specific hours, or as a result of specific event programming. Tis information feeds into areas such as energy management – such as when the heat or cooling needs to be turned down and when the lights should go off. AI-aided investigations into energy usage have even flagged hard-to- understand in-store problems – for instance, analysis by one retailer taking a closer look at electricity consumption discovered that it had been leaving on escalators connecting its four floors 24/7 for five years!
Drawing out the details In other cases, companies have used AI-enabled lease abstraction to help them make better-informed, more accurate business decisions in particular instances – just by letting them pull the relevant data from their leases. In another case, a managing agent with over 2,000 retail and other commercial leases was able to build a picture of environmental regulatory compliance across all the properties it manages using an AI-powered contact intelligence solution. Tere is little doubt we will continue to see more regulation in this
area. AI empowers companies such as this to address environmental sustainability issues as and when new lease negotiations come up. Te upshot is they futureproof their assets and/or property management portfolios.
Making the most of AI Tere is a lot of hype around AI, and it may not turn out to be the magic pill that many expect. Retail organisations should not invest in AI for AI’s sake. But where it can boost efficiency, provide better predictive outcomes and drive business results, adopting PropTech that leverages AI makes perfect sense.
June 2023 | 15
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