August 2021

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What Type of Smart Building Will Lead AI Adoption?

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Artificial intelligence (AI) is the inevitable future for buildings but just like the adoption of smart technology over the last decade, the introduction of AI will be different for each building vertical. Retail, hospitality, healthcare, and office buildings, for example, each discovered their own use cases for smart technology, their varying needs created different drivers and barriers that led to smart tech’s staggered adoption across the buildings landscape. Both PwC and McKinsey now predict that AI offers the medium-term potential to automate as much as 40% of the processes of the commercial real estate sector. At this critical turning point for the introduction of AI in commercial buildings, we are likely to see the same staggered adoption as AI proliferates across these different building verticals over the next 10 years. 

While all commercial buildings have experienced huge challenges during the pandemic, few have experienced the financial losses of non-food related brick-and-mortar retail. Deemed one of the least essential activities during the crisis, non-food retail outlets were among the first commercial spaces to close and will be the last to reopen as lockdowns ease across the world. Simultaneously, online shopping has seen huge gains in market share as consumers were forced to stay home, further accelerating the decline of in-person shopping. As we emerge from the pandemic, brick-and-mortar retailers will need to find innovative new ways to win back consumers and AI presents many new opportunities for this building vertical under threat.

“The last year has been a challenging time for large portions of the retail sector, but retailers have a long track record for innovation and adoption of new technologies both to improve operational efficiency and to enhance the customer experience,” explains our recent report – AI & Machine Learning in Smart Commercial Buildings. “Much of the focus of innovation for bricks and mortar retail is geared towards empowering stores to generate the same kinds of data on customers that are now built into online retail operations, improving understanding of shopper preferences and habits to enable a more custom and tailored shopping experience.”

A recent KPMG survey found that 86% of retailers believe AI has the potential to significantly improve organizational efficiencies. These include safety, security, and loss prevention, where AI-enabled video analytics can identify suspicious customer and employee activities, but also queue and inventory management, where AI offers new levels of efficiency and automation. AI-enabled payment is another promising feature, where facial recognition is allowing “pay with your face” solutions that allow customers to forgo both cash and cards in their shopping experience. The most sought after use case in the retail space, however, is customer profiling and engagement, where AI provides new methods to understand consumer behavior in order to optimize and personalize the physical retail experience.

Hospitality buildings are also enticed by the customer personalization opportunities presented by AI. Chatbots are already being used for hospitality, specifically in the booking process, but powered by AI they can draw in more information on the customer in order to better serve each individual guest. Going further, AI powered chatbots can become highly capable virtual assistants with the ability to control many different building systems and communicate effectively with guests. Energy intensive hospitality buildings are also seeing the huge efficiency benefits of AI to optimize energy use in their dynamic and unpredictable environments but capturing the greatest attention from the hospitality sector is undoubtedly applications focused on the guest experience.

“The majority of AI enabled solutions specifically targeted at hospitality are focused more on customer relationship management. Predictive Guest Intelligence (PGI) takes a high-level look at all the data available from critical indicators such as buying behaviors, travel purpose, social media, interests, booking channels, guest feedback and more,” explains the in-depth report. “This information can then be translated into insights, predictions, and recommendations that give hotels a closer look at each guest and what drives their intention. It also helps hoteliers to act on those insights to encourage personalized service, increased sales, and loyal, long-term guests.”

Healthcare is another very different type of building that is exploring the benefits of AI for a variety of applications. HVAC systems, for example, play a much more critical role in healthcare building than most other facilities, responsible for protecting not just patients but also medical staff, other employees, and visitors. AI-assisted systems can provide additional insight and supervisory control to help maintain sanitary airflow while at the same time optimizing energy usage of HVAC systems in healthcare. AI can also support the tracking and wayfinding of patients, staff, and visitors to avoid unnecessary traffic in corridors and ensure people can get where they need to be in critical moments. By combining all the data on healthcare building occupants, AI systems can go a step further by optimizing patient prioritization and flow, thereby increasing the capacity of spaces, reducing cost, and improving patient care.

Perhaps the greatest interest in AI for commercial buildings, however, comes from offices. Backed by the financial resources and motivations of the corporate world, AI is increasingly being seen as a potentially significant driver of productivity in the workplace. Almost every building system has implications for productivity in physical offices and all can benefit from a layer of AI over their processes. Greater intelligence around air quality, temperature, and lighting, for example, leads to increased occupant comfort and, therefore, productivity. The use of AI for access, security, cybersecurity, and predictive maintenance, meanwhile, reduces disruption to support productivity. Even AI energy management, while reducing cost, creates greener buildings that boost loyalty and attract better talent, which in turn increases productivity.

“For a very long time, the potential for AI to help transform building performance to make them more adaptive, efficient, and less costly to manage and maintain has been discussed and explored in research papers. What was missing from the picture until recently though, were credible use-cases and case-studies of commercially available solutions that offered tangible value to building owners,” states our comprehensive new AI report. “This status-quo has shifted considerably over the past two years, however, we’ve noted a steady rise in the number of companies launching and officially marketing their offerings as AI-powered, AI-enabled, or AI-driven services for almost all kinds of buildings.”


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