How AI will add value to retail in 2022

The rise of artificial intelligence (AI) is constantly shaping and reshaping our future. As pointed out during a recent global seminar, it might bring about a Fourth Industrial Revolution. Another study predicts that the global AI market will reach more than $500 billion by 2024. 

Businesses are already using it in many profitable ways. Among these are:

• Streamlining processes, analytics, and customer care
• Generating better insights for smarter decision making
• Enhancing productivity
• Coming up with innovative solutions

One of the sectors that can benefit tremendously from AI and ML is retail. Machine learning (ML) and predictive analytics can help retailers analyze data that they can use to make accurate and insightful decisions. All of this can turbocharge retail both online and offline at least in two different ways in 2022: 

1. Customer experience enhancement
2. Business efficiency
   

AI and Customer Experience

ML and automation can massively improve the customer experience while visiting and interacting with retail stores. Here's how retailers can benefit from it. 

In-store advantage

Using technology such as tracking systems and computer vision could free stores from cash counters. There would be no more queues and no more waiting. Customers will be charged directly via an app or a store account.

 For example, Amazon's grocery stores use a patented Walk Out technology. Customers enter the store by scanning a QR code in the Amazon app and inserting a linked credit or debit card. When they leave the store, they are automatically billed for the items in their virtual cart. A receipt is sent to them digitally. 

Other innovations include replacing paper labels with electronic labels and sensors on store shelves. These provide helpful information and personalization for shoppers.

Chatbots

Chatbots can revolutionize customer support and engagement. They can send automated alerts via push notifications, personalized promotions, daily offers, new launches, and product news. They can also play a role in lead generation by collecting customer data. These leads can then be converted through product recommendations and tailored offers.

 H&M took this a step further with a chatbot that provides outfit inspiration, new styles, and other recommendations. 

Visual and voice searches

AI can power visual searches online by using real-world photographs provided by the consumer for digital searches. This brings up a list of related results based on content and context. For the shopper, this can give a tangible sense of discovery, especially regarding home décor and fashion. Voice search is another powerful tool in terms of speed and convenience. It can be handy for otherwise occupied consumers or are multitasking driving, or doing household chores, for example.

Customer behavior and satisfaction

Algorithms can gather important information about customers when they visit a retail website. The data can then be used to make personalized offers to visitors via email marketing. Recommendations can be based on past preferences or purchases, browsing history, etc. Such information can also be used to make loyalty cards more valuable. Technology can also help mood tracking when the customers visit the physical stores. It can help sales staff mitigate or find resolutions to problems before they get escalated. 

AI and Retail Business Efficiency

Be it enhancing productivity or maintaining inventory; AI can help retailers make significant gains. Here are some possibilities:

Inventory management

Technology can calibrate a retailers merchandising and business strategies through efficient demand forecasts. 

For example, British supermarket chain Morrison's used an AI-based solution  forecast daily orders per store. This resulted in optimized store inventory based on a deep analysis of customer behavior. Such technology-driven inventory solutions can also allow retailers to plan their purchases more efficiently from external suppliers. The process can recognize the need for replenishment, supply and demand projections, and time is taken for delivery.

Streamlining the supply chain

Closely linked to inventory management is handling the entire supply chain. Algorithms can help identify all the links of a supply chain, thereby making it possible to identify the weaker links and spot inefficiencies, and provide a solution. They can estimate freight and delivery expenses, optimize routes, and ensure faster deliveries. Another important aspect is managing risks, especially in case of unforeseen events. AI can suggest a streamlined end-to-end approach by assessing and combining large data in the long run.

Research and Development

AI and ML can reveal consumer preferences based on demographics, online behavior, and purchase patterns. Combining such feedback and customer sentiment analysis can significantly impact research and development ( R&D). With the help of technology and analytics, the R&D team can work on data-derived hypotheses. It can help them design futuristic products that can satisfy the customers needs. But technology goes much beyond just R&D. A recent study showed how AI could power innovation across an entire enterprise.

Data Security

Sensitive data personal details of customers, elements of a company's internal operations, etc. can be safeguarded through big data analysis carried out by AI and ML. For retailers, these must be kept secure. Intelligent firewalls can employ ML for the continuous monitoring of networks. Pattern recognition that builds on previous breaches can be used. With the application of data over time, such firewalls can be improved and strengthened. Using technology tools, bots, and other malicious programs can also be blocked from a retailer's website. 

These are some of the many ways AI is reconfiguring the retail landscape across the world. It empowers retailers with data and analytics for better operations and customer satisfaction.

At Cogent, we develop customized AI solutions, which are accurate and scalable, for business problems. These encompass customer lifetime value, customer churn, and customer targeting. Please take a look at our offerings, and let us help by putting AI to work for you.