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Retail used to mean bricks-and-mortar. The experience of picking a product off the shelf, holding it in your hands, then making the decision: ‘to buy — or put back.’ These days, however, the experience is different. Online shopping has taken over. And traditional retailers need to update their offerings to meet expectations. In this article, we’ll show you how AI is helping the retail industry stay competitive in a digital-first world.
In the 21st century, retail mostly means eCommerce. Online purchases account for 87% of the UK’s non-grocery retail market<. In the United States, over two-thirds of shoppers regularly buy online.
Most shoppers see eCommerce as more convenient, cheaper, and altogether easier. However, the less-personalized shopping experience is one area where online stores can struggle. And this is a space where traditional retailers can use AI to make their operation more competitive.Harvard Business Review reports how AI can boost sales by as much as 50%, reduce costs by 60%, and offer a host of other benefits. While 65% of workers say, AI helps them make more informed business decisions, underscoring its importance, no matter which industry you work in.
If you’re looking for a way to improve your retail operation, consider AI — it offers plenty of advantages, both online and in-store.
Read on for the details.
11 Ways How AI Can Improve Retail
There’s no limit to the number of ways you can use AI in the retail industry. However, there are select initiatives you can implement today to make your retail operation more competitive.
Here, we cover eleven ways AI can help every retailer.
1. Forecast shifting consumer preferences
Machine learning algorithms can analyze vast volumes of historical and emerging data to identify industry patterns and shifts. Retailers can use these insights to forecast impending changes in consumer preferences, and then take proactive measures to keep their company strategies on-point.
2. Improve the customer experience
Innovative shopping applications offer significant opportunities for retailers to make-over the customer experience. This can start online with more targeted ads tailored to a shopper’s preferences. But it can also extend to using features like geo-targeting to share real-time recommendations based on a shopper’s location.
3. Enable visual search
Customers often like to run visual searches before buying a product online. Image-based search tools leverage smartphone cameras to help retailers make better recommendations to customers by displaying similar or related items, even using augmented reality to show how a piece of furniture would look in the customer’s home; or how an outfit looks when pieced together.
4. Offer chatbot-based support
Shoppers expect help, whether online or in-store. Chatbots can offer 24/7 support, not only answering queries but also recommending products based on a shopper’s browsing history, recent purchases, and personal preferences. And if a request becomes too complex, the AI-based bot can hand over the interaction to a human operator.
5. Personalize product recommendations
70% of shoppers are more likely to buy a product when it comes as a personal recommendation. AI’s ability to analyze swathes of data makes it the king of personalization, meaning machine learning algorithms are very good at recommending products that shoppers are likely to buy.
6. Personalize the entire shopping experience
Over 80% of Gen Z shoppers say the look of a retailer’s website impacts their purchasing decisions. Proving it’s never been more critical to create a custom experience for every visitor. AI can alter how a site looks in real-time using known preferences and interests, ensuring the perfect purchase-driving experience for every shopper.
7. Take convenience to the next level
The launch of Amazon Go has laid down the gauntlet to all retailers, showing ‘nothing is impossible.’ Amazon’s check-out-free grocery stores create an entirely new shopping experience that takes convenience to the next level — simply add items to your basket, and walk out.
8. Streamline the supply chain
AI offers the possibility of operational optimizations, using algorithms to track demand in real-time, then plan more efficient supply and fulfillment chains. Computers can even plot the best delivery routes for a fleet of vans, ensuring customers are never left waiting for a second longer than needed.
9. Reduce costs
The world’s biggest retailer, Walmart, is already using automation to reduce costs by shifting from human resources to robot assistants. These robots can carry out routine tasks such as scanning aisles for missing products, meaning fewer workers on the shop floor. But some bots are capable of more than tracking inventory.
OSHbot, for example, is a more personable android who can provide basic customer service, including helping shoppers locate items on the shelves. Simply walk up, say what you’re looking for, and wait for OSHbot to respond — it can pull up a list of products the store carries, even showing you where to find them.
10. Enhance in-store security
Many companies already use machine learning to spot payment fraud, preventing millions of fake transactions every day. Retailers can also deploy AI-based video surveillance in stores to identify suspicious behavior, then stop crimes like theft before they happen.
11. Predict consumer behavior
If retailers collect customer product feedback and track shopper sentiment over time, AI can interpret the data and guide retailers on the next steps. It can even analyze historical purchasing data, then use machine learning to predict upcoming trends and recommend areas of focus for R&D.
What Is The Future Of AI In Retail?
Retailers are under pressure.
Crises such as the current global pandemic are only increasing the strain as shoppers quickly shift their habits online, with many stores now struggling for survival.
But the future of retail is not all doom and gloom. In fact, we believe artificial intelligence will revolutionize the retail industry. AI can deliver immediate improvements to the shopping experience, business processes, and every retailer’s bottom line.
The use of AI in retail will help stores thrive, no matter what surprises the future holds.
Source: dlabs.ai