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5 Ways Artificial Intelligence is Changing the Retail Industry

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Last Updated on February 17, 2021

“Robots are taking over the world!”

Many films and TV shows explore this concept in their own unique ways, which makes it seem like art is indeed mirroring reality. While this may be true in most cases, it is still safe to assume that robots haven’t taken over – yet.

However, what is certain is that artificial intelligence (AI) is influencing the way the world works. A report from McKinsey & Company – a management consulting firm from the United States – revealed that AI is changing multiple sectors in the global economy, and retail could be next.

Of course, this isn’t necessarily a bad thing. It may even be considered better news, as Capgemini’s 2018 survey revealed that AI could save retail companies a whopping $340 billion year after year through 2022.

Whether you own a retail shop in Dubai or run an online grocery store, you should learn about these five ways AI is changing the way the industry operates, as shared by a reputable RFID solutions company:

Visual Search Support

When you look for something, what do you think about first when you don’t know what it’s called? What it looks like, of course.

Not everyone can describe the appearance of what they are looking for. Even if you can, you may need to do a bit more research to ensure that the word you came up with and the thing you are thinking about actually match.

Fortunately, there is an effective way to shorten this process: by doing visual searches.

Customers now rely on visual searches to make sure that they’re making the right decision before buying products online. It is only to be expected that many companies would capitalize on this by using images that match those of the users.

This technology has yet to become widely used, but it is expected to elevate smartphone cameras and sensors’ standards to meet the demand.

For now, big companies like Marks and Spencer, Walmart, and CarStory are trying out how well visual search can help them reach more people and take a bigger bite of the market pie. IKEA launched something similar in 2017 in the form of an app that allows consumers to input the dimensions to see how furniture pieces would look in the target room.

Insights on Customer Behavior

While this may not be something new, insights provided by artificial intelligence that run different data analytics on consumer behavior are boosting retail sales all over the world. After all, data is everywhere, even in search engines and automatic footfall counters.

In this modern world, shops and other retailers would do anything in their power to determine the best strategy to sell their wares. But to do so, they should be asking a different question – instead of asking “how to sell” their products, they should be pondering “why people buy them.”

This is where AI data analysis comes in handy.

Artificial intelligence learns from a person’s previous behavior recorded by their actions (i.e., visits to a particular store at a specific time). Then, it develops better offerings that are aligned with those behaviors. In short, retail systems run in AI understand customer intent and purchase context.

For instance, a search for white sneakers might mean a variety of things for different people, depending on every shopping scenario. AI uses details like the date of the search and how the query was phrased, among other things, to establish a closer customer-to-product match.

Robotic Assistance

This is probably the closest thing to a “robot invasion” that currently exists, but even then, it is still something you shouldn’t be worrying about. As a matter of fact, you should consider it as one of the best ways to speed up your retail operations.

You see, robotic assistance can help in almost all aspects of the business – from manufacturing to logistics. For now, let’s focus on tedious tasks like pricing, stocking, and displaying products in a store, where human error is most prominent.

Giant Eagle, Walmart, and other big retail players are already using robots to keep their aisles stocked. These AI-powered machines scan every aisle for missing products, thereby ensuring that they don’t run out of stock for any product due to missed or delayed inventory.

When a store is always well-stocked, customers are bound to visit more frequently, knowing that the establishment will always have what they need.

Targeted Marketing Through Product Recommendations

E-commerce remains one of the strongest sub-sectors of the retail industry, and this is expected to continue for years to come. Why? Because of targeted marketing made through product recommendations supported by artificial intelligence.

A study cited by Business Wire revealed 70 percent of consumers reported that they tend to consider certain products more because of recommendations.

An example of this is Spotify. While it may not be the traditional “retail” firm, this famous audio streaming mobile app successfully used AI recommendations to determine people’s listening trends today. This is because when consumers feel like a company takes the time to get to know them and understand their needs, they are more likely to become loyal to that firm.

Remember that it’s easy for customers to take their business elsewhere if they don’t feel valued. For this reason, offering a top-notch experience can be considered as equally important as providing high-quality products.

Enhanced Security

With more and more stores opting for self-checkouts and cashier-less checkouts, security may become a bit of an issue. Fortunately, AI combined with moving security cameras in drones can bolster surveillance and spot suspicious activity as it happens.

Drones are considered the “eye in the sky.” This means that they could someday become a practical solution in securing store premises, warehouses, and construction sites. Besides, having a moving and remote-controlled camera allows security personnel to see everywhere. No more blind spots.

Of course, traditional video surveillance is still useful, especially when the human factor is removed from the equation. How? With the help of intelligent video software that helps retailers figure out which activity is suspicious and which is not.

Transform Your Business with AI

Gone are the days when artificial intelligence was nothing more than science fiction. Today, AI can transform not just tech-related business – it can now make running a retail business easier and more profitable.


AUTHOR BIO

Vic Bageria is the Founder and CEO of Sávant Data System LLC, a retail solutions and services provider focused on empowering businesses with progressive technology solutions such as People Counting and In-Store Analytics to improve operational efficiency and profitability (such as provided by Xpandretail powered by Savant). Vic is an award-winning entrepreneur and visionary, with experience in building recurring revenue technology businesses, who has mastered the intersection of technology, consumer marketing, customer behavior and instore insights.

Professional Blogger. Android dev. Audiophile.

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