Hong Kong-based retailer A.S. Watson Group said on Thursday it will spend $70 million over the next three years in big data technologies, including investment in a Canadian artificial intelligence venture company.
A.S. Watson will consolidate its customer data holdings into a big data analysis system for retailers developed by Rubikloud to optimize sales promotion activities and business operations.
Rubikloud has an app designed to analyze customer characteristics and their purchase history using AI. The information will then be used for individual marketing and prediction of future sales.
When A.S. Watson introduced the app at European stores on a trial basis starting in 2015, sales from personalized promotion activities increased by more than 8% over 10 months, hence the latest tie-up decision.
“We are investing in big data amid global economic uncertainties because we believe that technology is a critical enabler for successful retailing in today’s world,” said Malina Ngai, chief operating officer of A.S. Watson Group, in a statement. Ngai added that Rubikloud’s technology will enable the company to “focus our resources, from back-end support to the shop floor, on building a better customer experience.”
Kerry Liu, CEO of Rubikloud, said the company aims to enhance A.S. Watson’s capabilities to personalize customer offers through advanced targeting by “applying machine learning and flexible big data architectures in practical applications.”
A.S. Watson is a subsidiary of conglomerate CK Hutchison Holdings, led by Li Ka-shing, a Hong Kong-based billionaire.
A.S. Watson has more than 13,000 retail stores, including the company’s drugstore chain, in 25 countries and regions such as Asia and Europe. Li’s venture fund Horizons Ventures has also invested in Rubikloud.