Rubikloud is using artificial intelligence and machine learning-based technologies to help retailers become more efficient, and plans to become the pre-eminent, global leader in AI software for enterprise retailers.
The Toronto-based business, which was founded in 2013, has already expanded into the U.S., Hong Kong and the U.K., and earlier this year closed a seed funding round led by Intel Capital which brought the company’s total investment up to $45 million to date.
Rubikloud’s co-founder and CEO Kerry Liu spoke to ITBusiness.ca about his thoughts on how AI is going to change the retail landscape and the role his company is playing in the industry.
Why bring automation to retail?
Before starting the company Liu and his fellow co-founders noticed retail companies were facing complicated problems that he calls impossible for a single person or traditional system to solve, things like handling hundreds of thousands of SKUs, the placing, pricing and promotion of products and even supply chain management.
They realized all these complicated problems retailers are facing were essentially the perfect problem for AI to solve.
“So we decided to kind of embark on those really complicated problems within retail, like high inventory management, how to price your products, how to allocate those products across all stores and how to promote those products to the right people,” says Liu.
Rubikloud then built products around those problems, with a focus on helping large retail companies. Today the startup offers three main products, Price and Promotion, Customer Lifecycle and Enterprise AI Platform, all using deep learning, machine learning and AI.
Every retailer is different, he says, even if they sell similar products, and evaluating these types of metrics can make businesses more efficient. For example says Liu, “If I’m constantly shopping at Fortinos on a regular basis in a very specific way, them promoting to me is very different than how someone else would shop at that exact same store.” He says that Rubikloud’s platforms are built to collect those data points and help large retailers.
Helping retailers adopt AI
According to Statistica, 49 per cent of retailers worldwide that adopted AI in 2018 say cost savings was the number one improvement when moving to AI-based tools. More than 40 per cent of respondents listed cost savings, increased productivity, increased revenue and more informed business decision as the top benefits to adopting AI business tools.
Rubikloud’s tagline is “changing retail with intelligent decision automation” and its various products are attempting to do just that. The Price and Promotion tool uses an AI platform to measure metrics and then provide the best options on how to price products, where to place them within brick and mortar stores and what promotions will have the best results.
On its website, Rubikloud states that three months after deploying its Price and Promotion tool one retailer saw a 30 per cent increase in forecast accuracy. “We’ve taken complex machine learning, neural networks and basic AI techniques to ensemble it all together to figure out the best possible permutation of price, promo…and making sure the retailer doesn’t overbuy, or underbuy, any of their products,” says Liu.
Liu offered the use case of a major Canadian retailer, (whose name he could not share), that on a regular basis has to deal with lots of different products that are also seasonal in nature, so always changing. The major retailer, which operates more than 85 large stores and more than 100 smaller stores, as well as an online store, needed help forecasting how much inventory to buy and how to price those items. Liu says once it started using Rubikloud’s Price and Promotions tool it saw pretty significant results, specifically in understanding how quickly to turn around products in-store versus online.
Other tools from the Toronto startup include, the Enterprise AI Platform, which is a cloud-native software-as-a-service (SaaS) that collects and stores retailers data and uses AI and machine learning to help them understand how to best use that data as a business. Essentially what Liu called a “data cleaning product.”
The Customer Lifecycle Manager also uses AI, but to increase customer loyalty to a brand by collecting data and offering personalized in-store and promotional experiences.
Liu says that personalization is one of the top ways that AI is going to change the consumer and retail world.
“The average customer likes the fact that Netflix takes their viewing into consideration when showing them more recommendations and when developing content,” Liu told ITBusiness.ca, noting that he sees this happening across industries, in airlines, banking and telecommunications companies. “[Rubikloud] thinks that AI is going to be very important…to help consumers get a better product, experience, cheaper products and vendors will basically be that much more valuable to its consumers.”
Not done yet
Despite having a reach that spans more than four countries, and key investors like Intel, Rubikloud doesn’t see itself as a true Canadian startup success story just yet.
“Success is not a function of how much money you’ve raised or how many people who have,” Liu claims. “It’s about changing the behaviour of an industry for the better.”
He believes that within the next five years retailers will fundamentally operate their businesses through automation and AI. “Even if it’s not with Rubikloud, it will happen,” stated Liu, “So when that happens and it is Rubikloud as the market leader then I’ll say we are successful.”
