Insite AI (for artificial Intelligence) has signed The Warehouse Group as one of two retailers globally that will use its product to augment buying decisions for retailers and give shoppers, it claims, "what they really want".
Insite AI gives retailers intelligent recommendations to better handle large-scale merchandising decisions, refining what is available to consumers, improving how products are priced, promoted and merchandised in stores.
The company was created and is owned by angel investment firm Goat Ventures after it went looking for an AI company that provided merchandising solutions and couldn’t find a viable option.
The business has raised $2 million in pre-seed capital from the New Zealand Venture Investment Fund (NZVIF) and philanthropist Sir David Levene.
The business currently has 11 staff who have moved from companies such as Xero, Air New Zealand, IBM, KEDRI and Soul Machines.
Insite AI will officially begin servicing customers in New Zealand and Australia in February through pilot customers including The Warehouse Group locally and Chemist Warehouse in Australia.
PwC Australia is the exclusive distributor of InsiteAI on both sides of the Tasman.
Insite AI chair Shaveer Mirpuri said shoppers are familiar with finding their favourite item is out of stock and all too often retailers get stuck with product they can’t sell.
“As consumers get savvier and retail margins get tighter, it’s important that every merchandising and buying decision is as precise as possible," he said.
Mirpuri said there had been little technology development for merchandising during the past 30 years to match retail’s evolution.“Retail is complex," he said. "Current buying-decisions are largely manual, and often made by gut feel, or with archaic software that can’t accurately see into the future."
Insite AI uses machine learning to synthesise and codify information, learn the process and provide merchandisers with accurate recommendations on what to buy, where to allocate stock, and how to price it.
“Anticipating customer trends and pre-empting stock quantities is a known pain point of the retail industry," said The Warehouse Group CEO Nick Grayston. "Partnering with Insite AI gives us access to innovative methodologies that could help solve this problem."
Insite AI's R&D and historical tests revealed that optimising merchandising and supply chain decisions with AI by one per cent can deliver a seven to ten figure increase on revenue, depending on the size of the retailer.
Mirpuri's LinkedIn page describes the company as "a small group of credible angel investors and exited entrepreneurs in NZ" with experience spanning investing, building, scaling, and exiting tech ventures.
"We invest our capital and expertise to create the future of big businesses," the page added. "The businesses are one of a kind opportunities. They combine unique technology and industry leading partners, in pursuit of global success."