According to various experts in the field Artificial Intelligence (AI) is changing the retail industry in so many ways to benefit the owners of retail stores, as well as, in enhancing customer experience. The AI market is expected to grow beyond $309 billion by 2026. Retailers should consider automating certain tasks to improve efficiency, reduce costs, and enhance employee and customer experiences.
AI Improves Customer Experience
AI has improved the world of business across the globe. By consolidating different (Customer Relationship Management) CRM systems with in-store customer data, AI parsers can observe customers’ shopping patterns and preferences and deliver loyalty-based, value-added services at the point of sale. AI- powered virtual assistants have been effective in addressing requests in real-time and to resolve level 1 queries of customers. Interactive Chatbots can assist customers in addressing queries in real-time and can be used to automate check-out counters through cashless payment methods.
AI and Natural Language Processing (NLP) powered virtual assistants give customers the ability to narrow down their options of purchase through visual searches, price optimisation and targeted / curated content.
Chatbots can communicate with customers in a consistent human-like and empathetic way to ensure that shopping experiences of customers are pleasant and memorable. AI continues to impact the retail industry in several ways that appeal to both the owners and customers of retail stores. AI impacts customer satisfaction and loyalty.
Walmart, the world’s largest retail company introduced interactive fitting rooms to millions of shoppers to enhance and simplify their shopping experience.
Ways in which Artificial Intelligence (AI) Technology is used in the Retail Industry
- Inventory Management
- Smart Shopping
- Customer Loyalty
- Virtual fitting rooms
- Marketing Campaign Management
Understanding Market Demands in Advance – Places Retail Store Owners at an Advantage.
By gathering information in advance from consumers, marketplace, and competitor data, retailers are able to create a forecast model to help predict the industry trend which allows for the store owners to effect change across their Marketing and Management Procurement strategies. Experts point out that over the next few years the average spend towards AI products in the retail industry will grow drastically.
Augmented Reality (AR) Furniture Shopping tool, Room Decorator, was launched by Amazon in 2020 to allow shoppers to view how furniture would look in their homes before making any purchases. Pulling from highly accurate AI training data, the AR solution tracks objects and shapes to give viewers a spatial perception that is accurate. Other more advanced tools allow for 2-D and 3-D in-room viewings.
Artificial Intelligence (AI) can support retail operations, increase profits, and optimise business processes. Other benefits include automisation, loss prevention and cost reduction. With AI employees can now spend less time on mundane tasks and more time devoted to customer service and experience. AI technology self-check-out innovation offers a secure method of scanning and helps prevent shoplifting. It is run without human assistance and allows for customers to have more control over their shopping experience. Implementation of AI gives retail management the power to make informed decisions based on data. AI technology can also track purchase patterns of customers and provide an alert when stock of best-selling products is reaching critically low levels. The patterns of customer purchases can also assist management in identifying seasonal item trends and when items would be in greater demand. In this way stores can be adequately stocked, and customers can be satisfied in being able to purchase their various commodities as needed. From the brief insights in this blog, you can definitely see the benefits of AI in the retail industry and the need to incorporate AI into retail company systems.
AI is playing an increasingly significant role in the retail industry, benefiting both owners and customers. Here are ten ways AI is impacting retail:
- Personalised Recommendations: AI analyses customers’ shopping histories, browsing habits, and preferences to suggest products. For customers, this creates a more tailored shopping experience, whilst owners benefit from increased sales and better engagement.
- Inventory Management: AI-driven algorithms can predict which products will be in demand, allowing store owners to optimise stock levels. This reduces costs associated with overstocking and lost sales from understocking.
- Chatbots and Customer Service: Virtual assistants or chatbots help answer customer queries 24/7, improving customer service by providing instant responses. For store owners, this reduces the manpower required for customer service.
- Price Optimisation: AI algorithms analyse market demand, competitor prices, and other factors to suggest the best pricing strategies, ensuring competitive pricing for customers and maximised profits for retailers.
- Visual Recognition: Through AI-driven visual search, customers can upload an image and find similar products available in the store, enhancing the shopping experience. This can lead to increased sales as customers find what they’re looking for more easily.
- Virtual Try-Ons: Using Augmented Reality (AR) powered by AI, customers can virtually try on clothes, accessories, or makeup, providing a fun and useful shopping experience from the comfort of their homes.
- Customer Insights and Behaviour Analysis: AI can analyse in-store video feeds to understand customer movements, the popularity of displays, and overall store performance. This provides invaluable insights for retailers to optimise store layouts and design promotions.
- Forecasting Trends: AI can analyse vast amounts of data from social media, fashion websites, and other sources to predict upcoming trends. Retailers can then stock up on trending items, whilst customers benefit from having the latest products available.
- Supply Chain Optimisation: AI helps streamline the supply chain by predicting the best routes, optimising delivery times, and forecasting demand, ensuring products are available when and where they’re needed.
- Enhanced Security: AI-driven surveillance systems can identify suspicious activities in real-time, reducing shoplifting and ensuring a safer shopping environment for customers. For retailers, this means reduced losses and potential insurance savings.
Both retailers and customers benefit from these AI-driven advancements. Retailers see improved efficiency, increased sales, and cost savings, whilst customers experience enhanced, personalised, and more convenient shopping journeys.
How can ISB Optimus (Pty) Ltd. help get your Business Aligned with AI technology?
ISB Optimus (Pty) Ltd. can help you gain more than just an AI solution that works for your business, you also gain a strategic partner committed to helping you stay at the forefront of technology and best practices in the retail industry.
Synthie Enoch, Content Administrator