10 Jun 2018
Nowadays AI-driven technologies have disrupted the global market across manifold industries. Forrester spells downright confidence that VC-backed investments in AI will triple over the next few years. The fact is unsurprising, however, given the benefits businesses can reap from implementing Artificial Intelligence solutions.
Will retail go unnoticed for these cutting-edge technology trends? Definitely not. According to a recent research by Deloitte and Salesforce, a brick-and-mortar sector is estimated to boost by $36 billion, and eCommerce will skyrocket by $50 billion respectively by 2022. With these figures in mind, retailers must find the most effective automated solutions to optimize business performance and deliver brand value to their customers at scale.
The opportunities of AI utilization
How can retailers capitalize on emerging technologies? Bluntly put, there are numerous ways to apply AI-fueled solutions in retail for gaining competitive benefits. Such retail giants like Amazon and Walmart have already got a prime mover advantage as they start off deploying AI, ML and blockchain-based methodology to improve their business cycle. The other market players don’t feel like falling behind the competitors either. A new study by Microsoft reveals that 45% of retailers plan to use artificial intelligence in the next three years.
Even though AI opportunities are not limitless, they will more than likely reshape the entire picture of today’s retail, both brick-and-mortar and eCommerce. That said, we can already witness a considerable reduction of labor costs resulted by AI-driven automation and optimization efforts. What efforts are exactly employed so far?
It’s always been a tough task for retail companies to handle huge amounts of disparate merchandise and customer data. Siloed enterprise data rules out the possibility of robust inventory management and ongoing analysis of customer feedback. Eventually, it will result in lesser conversion rates and greater customer churn. AI solutions can effectively address these issues by orchestrating all the data into actionable assets.
Predictive and prescriptive analytics empowered by Artificial Intelligence enable retailers to fine-tune customer targeting and segmentation, personalize shopping experience and buyer personas’ behaviors.
Reaping the AI benefits in retail
An American Express 2018 research shows that 87% of retailers agree their customers have evolved and new technologies must be employed to enhance shopping experience at large.
AI-based business models along with Machine Learning methods allow for efficient implementation of robotics and unmanned systems into any retail chain with no human interference required. Smart chatbots, in-store software and web applications can track and measure customers’ habits based on their previous purchases, optimize supply chain and procurement operations, automate the merchandising process, and predict future shoppers’ demands.
All in all, the most crucial AI impacts on retail can be boiled down to the following four applications:
Price OptimizationAI-based apps add much to cost-efficiency. This software can recommend the right price at the right time and the right location to maximize revenue and profit. Moreover, Machine Learning techniques are applied in various areas of marketing and merchandising, including product pricing, product assortment, promotions scheduling and marketing planning.
PersonalizationAI provides retailers with meaningful customer-centered approach that helps create a customizable sales strategy complying with shoppers’ needs and expectations. AI solutions ensure smooth customer journey, minimize cart abandonment issues, and provide a relevant assortment of goods tailored to each customer’s taste and preference.
Customer serviceChatbots, in-store and web software can be used to the benefit of retail when it is crucial to streamline time-intensive and results-oriented interaction with customers. AI solutions can immensely assist store associates by generating valid conversations patterns and scripts, timely responses and quick feedback measurement. All these eventuate in improvement of customer experience, and thus in greater ROI.
Inventory managementHaving all the merchandise data properly organized can make a great deal of profit out of a relatively little investment. Shop assistants can free up most of their time with decent data management software. No more rote merchandising tasks aimed at arranging multiple SKUs, no more unappetizing product descriptions to be filled asap. AI enables a fail-safe inventory management approach, which leaves retailers much elbow room for marketing and sales improvement.
If you like to get the most out of your retail store with robust AI-backed software solutions, you are a step away of gaining a competitive advantage. Feel free to contact us and get more detailed insights on how to integrate AI apps with your business.