Why AI Is The Future Of Retail

ai future of retail artificial intelligence technology retailers machine learning brick and mortar shop

Retail is moving fast, therefore, if you want to succeed, you’ll have to keep up with all of the different technology. One of the technologies is Artificial Intelligence or AI, and there are many studies that verify that it is, in fact, the future of retail. Keep reading to learn why. 

1. AI Provides A Variety Of Different Ways To Use It 

Typically, retailers are hesitant to give up and coming technologies a try unless they feel quite certain that it will pay off in the future. Capgemini Research Institute dove into how AI’s role in retail impacted retail and their detailed study revealed a lot of very promising information. To start, there are a lot more retailers that are utilizing AI within their firms. In addition, they are paying attention to customer-centric applications in three-quarters of the cases. On top of that, the research showed that if retailers extended beyond their current scope and put forth AI across their operations, they would be able to save over $340 billion by the year 2022. Take, for example, the German ecommerce brand, Otto. They utilize AI in order to forecast consumer purchasing patterns which has resulted in a decrease in returns by over 2 million products each year by providing suggestions that are much more accurate to shoppers. 

Other businesses utilize AI in order to prepare packages inside of warehouses or distribution centers by incorporating this technology into product picker assistants that staff use when either restocking shelves or preparing the products to get shipped. Because of the variety of options provided and the assurance of more in the horizon, retailers have an abundance of different ways to work with the technology which helps solidify the fact that AI is here to stay. 

2. AI Encourages Better Decision Making 

Analysts think that 2019 and 2020 will be when both AI and machine learning in retail, which is a subset of AI, will become incredibly important for those in retail who make decisions as these technologies can assist brands by pinpointing the items that people want the most and which ones won’t be selling as well. Afterwards, they can utilize this information in order to meet the demands of the customers that way nothing goes to waste. 

The French multinational retailer, Carrefour, has just started utilizing AI-driven analytics platforms for forecasting demand. During the 18-month pilot, they will collect information that is related to their stores, online orders, as well as their warehouses. They will then utilize all of that data in order to make customized algorithms that will keep products stocked, but just so that there is enough. Indeed, regardless of the amount that they sell or the number of customers that they cater to, retailers will always try to make the most cognizant decisions possible. AI makes this possible by analyzing data in a way that people could never. 

3. AI Offers The Personalization That Customers Want 

Artificial intelligence and machine learning technology doesn’t only customize the shopping experience by immensely decreasing return rates as stated earlier. Epsilon’s research stated that 80% of those who had responded claimed that there was a greater chance of them doing business with those firms that provided personalization while 90% stated that they considered personalization to be attractive. However, this isn’t unexpected when considering the previous trends leading up to this point. For instance, subscription boxes had been one of the trendiest concepts in 2017 while those that are still popular today utilize some personalization. 

Birchbox is one such subscription box which focuses on recognized beauty products. It allows people to select at least one of the items within their monthly box or they can choose from a variety of free samples whenever they purchase something from the Birchbox store. Customers are also able to pinpoint whether they prefer all natural products or if they are looking for products for curly hair, for instance. 

AI encourages personalization in many different ways, but especially via enhanced marketing. Someone may end up seeing various versions of a retail site based on how they had interacted with the brand in the past or they may get coupons along with their item receipts that go hand-in-hand with the products that they buy the most often. 

In the near future, there’s a big chance that customers will be accepting of AI-based personalization, granted it doesn’t breach privacy. Without customization, impertinence occurs, causing shopping to be less satisfying of a process. 

4. AI Keeps Theft To A Minimum 

The majority of retail stores are equipped with cameras, door alarms, as well as on-site loss prevention staff who can keep shoplifters at bay. While all of these safety measures do bring some value, AI acts as a beneficial addition. Indeed, based on the National Retail Federation, losses in inventory, also known as “shrink”, bring in large expenses for the retailers. In fact, based on NRF’s retail security study, shrink impacted the retail economy in 2017 by $46.8 billion. That number, however, could significantly decrease with the help of AI. For instance, StopLift is AI technology that assists with pinpointing what people do to trick self-checkout kiosks that way they can leave without having paid for the merchandise. There is also a Japanese-made AI security camera that is able to detect any suspicious poses that could indicate that someone is attempting to steal the products. 

Just how those who had opened up the first stores struggled with keeping theft out of their stores, retail theft in mall shops and brick and mortar stores is still an issue that won’t be going away anytime soon. That being said, today, the stores aren’t as basic and AI provides retailers with invaluable strategies that they can go after. 

AI Assist Retailers with Getting Everything They Need to Succeed 

As of recent, several parts of the retail industry like malls and brick-and-mortar stores have had to deal with major plunges in foot traffic and sales. There is no doubt that there will be bumps in the road as AI is not a solution that can solve everything in order to stabilize the future of retail. However, everything about artificial intelligence and machine learning mentioned above outlines what kind of beneficial advantages it could bring when it comes to dealing with those roadblocks as well as when it comes to satisfying the customers.

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