For forward-thinking retailers, it’s all about artificial intelligence. Get the scoop on the many ways AI is transforming retail and the shopping experience.
Automated checkouts. Augmented reality. Facial recognition.
As the retail industry reassesses its approach to both online shopping and brick-and-mortar stores, it is clear that artificial intelligence (AI) will have a huge impact on the industry over the next decade. In fact, research has indicated that global retailer spending on AI will reach $7.3 billion annually by 2022, up from $2 billion in 2018. Further, by 2024, AI investment is expected to reach $110 billion.
From boosting efficiency with robots and sensors to driving sales by recommending products based on big data and analytics and personalization, AI is reshaping retail as we know it.
Is Retail Ready for AI?
While the pandemic forced many retailers to close their doors once and for all, it also opened up doors to AI adoption. According to a study conducted by KPMG, 90 percent of retail business leaders indicated that their employees are prepared and have the skills for AI adoption. Further, 53 percent of business leaders in retail said the COVID-19 pandemic increased their company’s pace of adoption. At the same time, 49 percent believe AI adoption is moving faster than it should in their industry.
What does this mean? Well, retailers are clearly tuned into customer expectations and turning to AI and analytics as a part of their digital transformations and business strategies. The concern about the speed of adoption, however, reminds retailers to ensure proper process and controls are in place along with change management and effective training to address AI adoption risks. However, the significant increase in AI preparedness and pace of adoption may also indicate that some retailers have been able to address three key factors on the road to AI: rapidly transforming and upgrading legacy systems, complying with data security and privacy regulations, and balancing strategic priorities competing for budget and resources.
In the next two years, retail leaders expect that AI will have its biggest impact on the industry through customer intelligence, inventory management, and customer service virtual assistants. By investing in AI and its ability to quickly analyze data collected and accurately, retailers will be able to address one of their biggest challenges over the past year: demand planning and forecasting.
How AI Is Transforming the Retail Sector
Today, retail is all about creating unique customer experiences and a seamless customer journey. By using AI to increase customer engagement, enhance personalization, and provide support to sales teams, these new innovations will boost customer retention and drive sales.
Check out the following AI-enabled trends:
1. Personalized online experiences – today’s online shoppers are already familiar with AI systems offering suggestions and cross-selling products to them. AI and machine learning can keep track of previous customer selections and use predictive analytics to forecast future purchases – something that can lead to repeat buying and customer loyalty. Further, virtual assistants embedded into a retailer’s website can also help predict customer behavior before they’ve started shopping, tailoring the shopping experience to the customer. If customers have questions about returns, when an item might come back in stock or alternative delivery options such as in-store pick-up, virtual assistants can conveniently provide that information instantaneously. Overall, today’s customers are guaranteed the type of personalized shopping experience that wasn’t possible ten years ago – all thanks to AI.
2. Regenerating brick-and-mortar stores – According to Global Market Insights, AI in retail is predicted to be valued at $8 billion by 2024. Further, digital employees – also known as automated team members – are being delivered via smartphones, tablets, and in-store interactive kiosks. The use of digital employees creates a simple, easy-to-use experience for the consumer with a familiar form of technology and without the need for human-to-human contact. At the same time, in-store virtual assistants use machine learning to access buying history and individual preferences while keeping track of store visits, allowing retailers to create a holistic view of shopper behavior and a streamlined customer journey that spans both online and physical stores.
3. AI–powered personal shoppers – AI-powered virtual assistants can reveal pricing details, offer new product options, and provide delivery estimates, among other capabilities. With back-end integrations with CRM, supply chain management, and enterprise resource planning software (ERP), they can also provide real-time updates about personalized items that aren’t available in-store, when they’ll be ready to ship, and when they’ll arrive. Further, with natural language processing, these virtual assistants can communicate via talk or text in a conversational manner that helps foster a stronger bond between the retailer and the customer. The virtual assistant also is supported by learning algorithms, expanding its knowledge bank as it continues to interact with customers.
4. Contactless shopping – AI is also behind “walk-out” shopping, which allows customers to walk into a store, pick what they want, then leave without stopping at a single check-out thanks to a fully automated payment process. Through computer vision, deep learning, and sensors, the horizons for retailers are expanding significantly. AI can predict the products a customer will buy while computer vision and sensors understand which items have been chosen and accurately charge customers for their purchases. Because a customer isn’t charged until they leave the store, they can browse at their leisure and don’t have to worry about being charged for items they haven’t chosen.
Stefanini’s AI Capabilities for Retail
Today’s retail landscape is focused on personalized experiences and an omni-channel approach. Our SAI suite is made up of several AI technologies that can empower retailers to take full advantage of the potential of AI.
With our ecosystem of tools, our global team of experts can help you design, plan, and build your AI experience while reducing costs and breaking down barriers to AI adoption. Through computer vision, robotics, data science, and more, we can build the right solution your business needs to stay at the forefront of digital transformation.
Let’s turn your AI dreams into reality and co-create the right solution for your business! Contact us today to get started.