“AI is the new electricity” said Andrew Ng, computer scientist and co-founder of online university, Coursera. Artificial intelligence (AI) has indeed come a long way from being confined in the research laboratories or science fiction movies. It is a persistent reality in today’s world, which has permeated every layer of business, causing disruptions of unprecedented magnitude.
In such a short span of time, AI has an incredible impact in reshaping the entire retail landscape by boosting productivity, increasing accuracy and improving reliability of business intelligence.
AI and machine learning have already begun to make sweeping changes to the entire retail ecosystem. Spread across the supply chain, customer acquisition, shopping experience, purchase pattern analysis, and customer retention and loyalty, the value that AI brings to each aspect of retail is both intensive and revenue-boosting.
Consumers today are more self-aware, and demanding than any generation ever before. It is about “I want what I want when I want it”, which stands for personalized, targeted, omnichannel, ever-present market place enabled by the Internet. Businesses that understand this new paradigm and deliver, are the ones that are going to win.
By increasing customer awareness of a brand, and informing the brand about its customer personalities and behaviours at a granular level, AI enables fulfilment of customer desires by accurately analysing consumer behaviour. AI helps engage consumers by producing targeted content and curated lists, which all help sell well, faster, and in bigger volumes to improve the bottom line.
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Traditionally, AI has been applied in retail in the realms of customer segmentation, inventory management, recommendations, campaign management and in creating insights. The evolved AI of today helps retail companies in doing much more such as enhancing inventory management, enhancing targeted recommendations, and keep churning out sticky content that makes customers visit, and eventually, buy.
In ecommerce, techniques such as collaborative filtering are employed to tailor recommendations based on personalities, item-item similarity, grouping, and targeted shopping deals. AI also adapts to provide recommendations that suit seasonality and business verticals, to provide the user just what he/she needs before even one asks for it. Such effective engagement directly translates to more sales.
Predictive analytics of consumer behaviour helps determine inventory better, and dynamically deploy vouchers, coupons and discounts to maximise engagement. Doing it all is an intelligent system that crunches data in huge volumes, and helps retailers makes sense of it by providing actionable intelligence.
AI also helps in the efficient management of inventory, with evolved logistics that stocks by predicting customer behaviour, and also in the application of drones and other better material handling systems that create a fluid and fast process from click to delivery.
Retailers can now access deeper insights about their customers with a click of a button on an easy dashboard. Such data-backed understanding helps retail companies hyper personalize shopping experiences to unprecedented levels. Customers of today, especially millennials (aged 35 and younger) grew up with the Internet, and are much more aware than the previous generations.
By default, they expect their retail shopping experience to be highly personalized, where every inch of screen space is expected to be tailor fit to reflect even the smallest detail of one’s personality and buying power.
Thanks to what is called the ‘phygital’ retail – where brick-and-mortal stores can be infused with digital capabilities. In omnichannel retail, where buying points are diverse and inclusive, AI is expected to straddle such spaces, and make retail a much more targeted, immersive, and pleasantly-personalized experience in the near future. Wold over, such omnichannel approach that offers such smart and seamless shopping experiences for customers has begun to appears a norm than an innovation.
Behind the flashy screens, lie the ability of AI evolution in the areas of vision, speech and neuro linguistic programming (NLP – that helps understand the deeper motives of the subconscious mind by studying human behaviour).
Such evolved technologies fuelled by sheer computing power help fruitful use-case analysis, and better engagement of the customer by helping him/her shop not just more, but better and faster. Applying this omni-channel capability, retail companies can transform most just their online operations, but physical stores as well.
While extensive application of AI in all aspects of retail across the world is still in its infancy, it is expected to evolve faster than we think, thanks to its very nature: Continuous self-learning to make processes better. The rise of AI is also not expected to limit itself to e-commerce. We can expect new surprises in every business realm, where AI would be the enabler behind the screens.