As per Plunkett Research retail is considered as one the largest industries in the work and in 2017, it made an estimated total sales of $5.73 trillion. Now, this number quite more than from what it was in 2016 ($5.52 trillion) based on the US Census Bureau. Today consumers are enjoying a new level of shopping experience both at online and offline stores with the help of artificial intelligence. Across the retail industry artificial intelligence is applied in different innovative manner and it covers every step before the actual sale as well as the time after making the purchase.
With the implementation of AI it becomes possible for the businesses to keep up with customer expectations. Different techniques are now used across the retail sector and AI plays a key role in the transformation. As per IBM survey, around 91% executives in the retail industry believe that disruptive role will be played in the industry through cognitive computing. Again, 83% of the executives believe that this will be responsible to have critical impact on the retail businesses in the future. This means that it will become important for the retailers to make use of artificial intelligence in their businesses to increase sales, stay ahead of competition as well as gain customer loyalty.
Read also: What’s Possible With Artificial Intelligence for Your Business
Artificial Intelligence is said to revolutionize the retail sector and some of the ways it does are:
Personalized Consumer Experiences
In order to boost more sales and get more number of customers coming to the store again and again, personalized consumer experiences can be used. The way businesses are trying to reach the customers is being changed and revolutionized by artificial intelligence by integrating advanced digital technologies. It makes use of chatbots to automate responses just like humans, getting hand on the purchase history data and creating retail experiences. For the consumers who are looking for amazing shopping experience, offering personalization can be an innovative method the retailer opts for.
Around half of the customers believe that offering personalized promotions online on on-demand basis can be effective while the others plans to enjoy the same at the physical stores. Customer mentality is changing and they do enjoy the freedom of looking for products anywhere at any time and purchase them from whoever and whenever they want.
AI is working onto offer personalized experiences to the customers and some of the areas covered are mentioned here:
Chatbot Experiences
With chatbots businesses are now able to offer personalized and uninterrupted round the clock customer service along with customized recommendations.
Conversational Interfaces
A number of products have come up like Google Home or Amazon Echo which can be used by the users to get information by asking questions in the form of command. Here the customers ask questions and get relevant answers about the products, deals, for query or items available online. Here Natural Language Understanding is used for establish a natural conversational connection between humans and machines.
Digital wearable experiences also called as virtual mirrors
The retail brand UNIQLO makes use of the Holition’s Magic Mirror technology to help users virtually “try on” the clothing to see know it looks in different colors and patterns. Similarly, MAC Cosmetics come with ModiFace — a mirror with AR technology to try out different makeup products virtually and see how its work in real-time.
Machine Learning
By making use of machine learning it will become possible for the retailers to offer personalized service to their customers and offer them the right and relevant products and deals which have been calculated based on the previous shopping habits.
Related: Machine Learning Redefines the Way Machines Work with You
Experiential-Based Retail Model
This is a step ahead of what retailers do now and is all about offering an experience where technology meets entertainment. This can be like dressing rooms, live events, live product demonstrations, augmented jewellery counters, pop-up stores, etc.
Gesture Recognition
By capturing the gestures, retailers can offer personalized shopping experience to the customers by translating it into commands with the help of computer monitors that are touchless so that customers can easily find the exact product that they are looking for.
Robots to Increase Traffic
In order to increase foot traffic in stores and boost conversions for better revenue, human like robots chat with the shoppers. They help them find products, answer their queries and even offer them directions when needed.
Automated Cash Registers
It is possible to speed up the checkout process with the help of automated cash registers. You must have seen automated self-checkout lanes at larger retailers and supermarkets which help the people to buy and check out of the place at the earliest.
With customers getting smarter and well informed about the products they plan to buy, it really becomes important for the retailers to offer personalized experiences in order to meet customer demands precisely. The personalized user experience should be focused on engaging customers in such a manner that they make a purchase as it is specially designed for them. With personalization the brand gives out the message to the shoppers that they are keen to understand their needs and cater to them accordingly. This also helps the brand to be proactive at times by delivering consumer needs before they actually want that.
Customer Relationship Management
In order to create customer focused strategies and experiences CRM systems needs data. Such kind of customer data will help to get valuable information about the customers which can be used to design right marketing plan, automate marketing as well as shorten the sales cycles.
Retails can gain from the analytics and traditional business intelligence that they gain from transactional systems. Companies can benefit in numerous ways with the help of business intelligence and analytics that can be used for inventory, sales and marketing promotions. Retailers can make faster and smarter decisions, predict future performance, get most useful information and even come up with self-service offerings.
In order to improve customer service and safety retailers are now starting to use video analytics. This helps them to collect data on how a customer navigates within the store and engages with the product. Video analytics can help to know about any security threats as well as to know if any of the employees is not working within the company policies.
When you have AI integrated to the CRM system you will be able to automate the customer queries that come in regularly. This decreases the number of customer complaints getting escalated and results in improved customer satisfaction.
By the use of customer relationship management software it becomes easy for the retailer to have improved connection with their potential and existing customers. When they take time to analyse the interactions and other data, they get to improve the current communication they have with their customers and the prospects. With CRM software it becomes possible to increase customer retention which directly focuses on sales growth all the while offering enhanced customer experience through customer satisfaction and customized offerings. For the retail businesses choosing an effective customer relationship management software becomes essential as it helps them to stay competitive in the market and offer the best to the customers as they are not ready to take anything less.
Manufacturing
Robots are now used across manufacturing industry and it helps them create a new virtual workforce and helps with intelligent automation. Businesses achieve this by employing robots along with human workers at the warehouses and by making use of an AI platform to handle customer queries and manufacturing.
At the Amazon fulfilment centres robots are used to take care of the manufacturing tasks along with the human partners. They are used to lift heavy products, stocking shelves, taking out items from the shelves, and packing items efficiently. Similarly, smart sensors are now used in place of cashiers who helps to save from wasting more materials and money all the while making the workflow better and improve accuracy.
As per one of the articles from the Forbes, it is said that production capacity of the businesses which turn smarter by predicting consumer behaviour, performing skilled labor and collecting information increases by 20%. They do this by offering relevant data easily to both sides of the supply chain. This article also points to the fact that use of smarter integrated IT systems has helped with lower production costs, less wastage of materials and time, optimal accuracy and faster turnarounds. This helps such businesses to fulfil the needs of the customers in faster and efficient manner.
Based on the report from Accenture, it has been predicted that by 2035 the companies which go for AI to make the best use of their time will be able to boost the labor productivity at the industry level by 35%.
AI is said to increase speed, improve quality of goods in the manufacturing unit and bring down the production costs.
Logistics and Delivery
Right from the way companies are taking care of inventory to delivering packages, AI technologies in logistics and delivery has helped very much to streamline and improve the way businesses do things like keeping track of everything. The technological advancements in AI today have made things simpler for businesses and it helps them to easily manage inventory and quickly and efficiently make on-demand deliveries. When it comes to logistics and delivery, AI technologies can be considered as the cost-effective approach to improve and optimize it.
Inventory management
By using optimization algorithms AI is changing inventory management and this helps them to have better ability to keep up with the changing supply and demand by maximizing stock levels and reducing stock depletions, increasing ROI and by preventing facility malfunctions that are costly.
Supply chain
In order to “provide supply chain visibility, transparency and insight into supply chain data and processes” IBM’s Watson Supply chain makes use of cognitive learning by tracking supply chain and predicting disruptions. By gathering and correlating data collected from different sources it achieves it.
Last mile delivery
Some of the roles played by AI in last mile delivery are mentioned below:
- Using autonomous vehicles for deliveries
- Completing last mile deliveries using drones
- Completing deliveries using droids or small AI machines
- Small distribution centers setup using delivery trucks.
This is done by embedding the information into the transporting vehicles and the products, like journey, origin, destination and recipients of goods by making use of technologies like telematics, Internet of Things, remote sensing and geospatial mapping. So when the materials move through the different stages of the supply chain it builds up a trial of data which is picked by AI. AI makes use of such large quantities of data to get information as well as do self-analysis to learn lessons.
In retail, the key to success is to stay on time when it comes to delivering goods and services and so understanding the data-patterns and studying them becomes very important to take informed decisions in logistics. Retail logistics can eliminate any kind of shipment delays, predict demand and plan operations and align them in advance by making use of the power of AI and big data.
Amazon has already understood well the role of AI in logistics and so it is coming up with Next-generation logistics solution by investing high in R&D. Amazon being in the business of delivering products and services, it focuses more on logistics and you can see that 80 of the patents in 2016 were on logistics network and it is focused on getting patents for its cybersecurity and cloud computing efforts.
Summary
Based on the technological advancements, retail industry has grown exponentially. For brands like Amazon which is making use of AI, the technology offers a breakthrough. AI has helped to improve efficiency and it has also helped businesses in offering a more personalized experience. With time AI will continue to evolve and it will work towards fulfilling the demands of the shoppers in smarter and better manner.
