No longer the exclusive purview of tech companies and giant e-comms, AI is also transforming the traditional retail landscape.

Technology, AI, Retail, Digital Assistant, Chatbot
Traditional retailers are feeling the need to step up their game. Not only are they facing intense competition from huge mega-corporations like Amazon, they’re also seeing smaller, online-only stores take a bite from their customer base (and profits). But as the saying goes, if you can’t beat them, join them. And that’s exactly what retailers are doing: using the same AI-based technology that industry giants and tech companies do to modernize the shopping experience – inside and out.

In this article, we’ll look at some trending ways retailers are using AI to prepare for the changes a new decade will bring.


AI Trends in Retail for 2020 and Beyond

Perhaps the most interesting trend is AI itself: : Juniper Research predicts that retailer spending on AI will hit $7.3 billion in the next two years. While internal uses (fraud prevention, recommendation engines, task automation, MAP monitoring, etc.) will certainly play their part, it’s AI’s customer-facing aspects that have stirred the most interest:

  1. Customer Profiles: AI facilitates both the collection and integration of many kinds of data, which allows retailers to create very detailed customer segments and profiles. It also provides the ability to use more dynamic techniques to group individuals than were previously used.
  2. Customer Service: AI has become an essential part of customer service applications. AI-powered chatbots are serving as the initial point of contact online and via mobile apps; we’re also seeing a limited rollout of in-store customer service robots (see below), which can help direct customers, answer questions, suggest products, and deliver goods.
  3. Targeted Marketing: Using historical purchase and customer preference data, as well as data from similar customers or customer groups, AI guides retailers in creating highly targeted marketing campaigns. These increase customer loyalty and retention and boost conversion rates.
  4. Optimized Store Layout: Using video and behavioral analytics on information gleaned from in-store cameras, retailers can study customers’ actions. This information can be used to understand traffic patterns, which – when combined with sales data showing items that tend to be purchased together – enables store management to adopt the best configuration of goods for that location. Behavior analytics can also reduce theft and improve in-store security.

As we can see, several of AI’s retail applications are strictly behind the scenes. But the modern consumer is very comfortable with technology. Will we see AI directly impacting customers’ in-store experience? It’s a safe bet that we will, because in some ways we already are.


Four Examples of AI in the Retail Space

There are many ways AI is changing customers’ retail experience. These examples – featuring some of the world’s most recognizable companies – are just the tip of the iceberg; for a comprehensive overview, we suggest this Forbes article.

  • Starbucks’ AI-powered virtual barista app. Mobile apps are a popular way to get AI into the hands of consumers – and give retailers another rich trove of customer data. My Starbucks Barista brings voice-activated tech to the coffeehouse; customers can place voice orders, interact with a virtual barista for beverage suggestions, pay for their purchases, and even select their pickup location. [Source: TechCrunch]
  • Walmart’s robotic grocery assistants. Supermarket News reports that mega-retailer Walmart tested a new automated “personal in-store shopper” that retrieves customers’ online grocery orders. This system is designed to work with employees (who assemble and deliver the actual orders to customers) as a time- and labor-saving tool.
  • Caper’s Smart Cart. If you’ve ever visited a store, looked at the long checkout lines, and ducked back out again, the Caper Smart Cart may be the answer to your (and many retailers’) problem. The cart acts as an autonomous checkout: items are scanned as they enter the cart, customers pay at the cart using a card or mobile payment, and that’s it. There’s no app to download and no line to wait in.
  • Home Depot’s digital assistant app. NAVii, Lowe’s in-store robot, might have gotten all the attention, but Home Depot’s app offers some of the same features. It doesn’t greet you as you enter the store, but it does offer image search, voice search, in-store product locations (to the exact aisle and bay), and access to online product reviews. There’s also an augmented reality option that allows users to virtually try out furniture in their homes. In short, the app functions very much like a digital assistant to shoppers, helping them decide on purchases and locate items in the store.


How Will You Adapt to Retail’s AI Moment?

Not every retailer will need all of the AI applications mentioned in this article, but every retailer will need to implement some form of AI to stay competitive. Whether it’s behind the scenes processing data and delivering marketing insights, powering customer service chatbots, or automating routine tasks in the warehouse, AI has already changed the face of retail. Retailers would do well to stay abreast of current trends as they prepare to enter the next decade.


Authored by: LK Sharma, Director Technology Services at Absolutdata and Richa Kapoor, Marketing Manager at Absolutdata



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