Is AI in Retail Here to Stay? Benefits, Uses, Considerations
How ready are you to adopt Artificial Intelligence in retail? Artificial intelligence is evolving each new day, and so is the retail sector.
From real-time customized promotions and computer vision to enforcing machine learning for managing inventories, retailers are harnessing the power of AI by connecting with their clients and optimizing operations.
To edge out competitors, retailers adopt AI to connect and respond to their customer’s needs by converting data into insights to make informed decisions that enhance customer experience, generate revenue, and centralize operations.
This article will look at AI in the retail sector, its benefits, applications, considerations, and why you should adopt AI to grow your retail business.
What Is AI Retail?
Artificial intelligence in retail integrates technologies like predictive analytics and machine learning to collect and analyze information. Collected information is processed into data that retailers can use to predict, inform, forecast, and make data-driven business decisions.
6 Top Uses of AI in Retail
AI in retail has plenty of applications that optimize and streamline operations while cutting costs. Below are some technologies in use by online and offline retail stores:
1. Automated Checkouts
Automated checkouts cut down on employee compensation and the wait time, increasing efficiency while cutting down on operational expenses.
A retail store uses computer vision integrated into the store’s cameras connected to the stock database. When a customer picks an item, the cameras recognize the goods picked. A customer can pay using payment cards or an app account with a smartphone when exiting the store.
2. Inventory management
There is demand for better forecasting in the retail industry, and AI fills the gap. AI technology is mining and generating insights from different marketplaces, competitors, and consumer data.
Retail businesses can now use intelligent tools to forecast future industry shifts to proactively set the organization’s merchandising, marketing, and business strategies.
By identifying future marketing trends, retailers can optimize their store design and shelving layout to promote trending products—the trickle-down impacts the pricing, promotional, and supply chain planning.
3. Interactive Chat
By adopting machine learning and AI, businesses redefine how they interact with customers. For example, chatbots interact with customers to answer FAQs as they collect vital data that can give some insight for future decision-making.
4. Guided Discovery
Automated assistants help customers make purchase decisions by narrowing down their selections. AI recommends a product or service based on customers’ preferences and needs.
5. Operations Optimization
Operations are optimized when AI is integrated with the logistics management system to monitor the retailer’s staffing, distribution, inventory, and delivery schemes in real-time to generate an efficient supply chain while improving the customer experience.
6. Dynamic Outreach
AI in marketing systems and advanced CRM offers insights into consumers’ preferences and buying behaviors via repeated interaction. A personalized customer profile is created, and one can use the data for personalized and proactive inbound marketing.
How Artificial Intelligence is Reshaping Retailing
Digital transformation in retail sets apart businesses that have adopted AI from those that have not. Here are some benefits of adopting Artificial Intelligence in retail.
- Captivating Customers
- Creating AI Experience
- Generation of Insights from Data
- Synchronization of Online and Offline Retail
- Empowering Flexible Logistics Networks
Examples of Artificial Intelligence
Retailers who adopt AI have a competitive edge over their competitors and generate good revenue while cutting operational costs. Below are examples of retailers who have adopted AI into their retail business:
- Visual Search
Neiman Marcus: Neiman Marcus is a luxurious departmental store that uses the “Snap. Find. Shop.”—app for customers to find similar or identical products in their store.
- On the Go Orders
Taco Bell: You want it, order it. Through Taco Bell AI, you can order food by voice command or a simple text.
Lowes: Locating an item in a hardware store is a hectic affair. The LoweBot gives customers directions to find their desired goods and monitors their inventory.
- Inventory Management
H&M: H&M has adopted AI to keep an inventory of store receipts and generate sales in each store. It lets them know what item to stock or promote in a given store. H&M can utilize this data to optimize shelving layout to promote products.
- Smart Store
Rebbeca Minkoff Designs: Customers can browse different clothing attires and fit them via interactive fitting rooms that use RFID technology to inform them of other sizes and colors available.
Artificial Intelligence in the Retail Supply Chain
AI is transforming the supply chain in depth. It ensures optimum inventory management and product delivery. AI gives deep insights into how the supply chain operates to detect the bottlenecks to optimize operations in the supply chain.
Top Retail AI Companies
The Technology sector depends on data from customer analysis and the organization’s operations to make decisions. Here are the top 10 AI retail companies:
- Intel Corporation
- Sentient Technologies
- Sap SE
- Infinite Analytics
- Standard Cognition
- Deep Instinct
Future Trends of AI in the Retail Industry
As more retailers embrace and incorporate technology, AI demand and forecasting look bright in the future. In the future, AI will be in a position to perform the following functions:
- Conduct Prescriptive and predictive analytics
- Generation of supply chain dataset to aid in the decision-making process
- Optimization of orders and displays to meet demand
What to Consider Before Implementing AI
Different retailers will offer various solutions for your business. Before adopting any AI, always consider the organization’s long-term goal. Here are factors to consider:
- Define your objectives
- Opt for IT infrastructure updates
- Gather necessary data
- Define your metrics to ensure project success
You can also ask your vendor the following questions:
- Why is AI better than traditional retail?
- How will your data be processed?
- How will you derive the needed information to implement AI?
- What experience do they have in solving similar issues?
Storflex store designers have thirty years of experience working with retail industry leaders. We understand the challenges retailers face, which is why Storflex isn’t just your display partner, but your strategic partner.
Contact us or schedule a sales call today to evaluate your store design to generate revenue and grow your business strategically.