With the development of the digital environment, more clients are realizing how the digitization of retail helps save their time and money and want to benefit from the innovation and opportunities delivered by modern technologies. And not only is it true for online retail but also for traditional brick and mortar stores. Artificial intelligence solutions are one of the ways of improving the existing retail industry. In this article, we will explain how to apply AI in the retail sector and what advantages it provides both for businesses and customers.
The rapidly changing world dictates new rules and impacts the way people do shopping. With the help of AI, retailers can significantly improve the way they do business and provide their target clients with a more personalized shopping experience. Here are some great examples of AI in retail.
How is AI Used in the Retail Industry?
Amazon represents one of the greatest AI use cases in retail. From accurate predictions and product recommendations to efficient supply chain management, this market giant managed to take maximum advantage of solutions delivered by Artificial Intelligence. And these are only a few examples of AI use in retail.
Business intelligence tools enable more accurate demand forecasting and help to keep an eye on the supplies to make sure you have enough products when and where your clients need them. Besides that, AI allows making timely changes to your supplies and pricing by analyzing competitors’ data and changing market requirements.
Smart Shopping Carts
The newest and probably one of the most fascinating AI use cases in retail, smart shopping carts do so much more than just allow eliminating lines and reducing waiting time to a minimum. Customers can get product recommendations based on where they are in the store and also on their purchase history. Smart shopping carts can also gather information on how users interact with certain products which can give ideas on more efficient product placement within the store, marketing opportunities and more.
Customer Loyalty Management
It’s not enough to just attract new customers, it’s important to keep them engaged and make them stay with you as long as possible. Building up client loyalty can play a key role in your business success. Artificial Intelligence and deep learning allow collecting and analyzing data about your customers’ behavior, helping businesses to segment their target audience and create personalized incentives that appeal to clients more effectively
Marketing Campaign Management
AI helps to create personalized marketing campaigns to target customers with relevant offers based on the order history and interaction with the site and brand. Other data insights received with the help of Artificial Intelligence can help understand which products are frequently bought together, thus allowing marketers to create appealing bundle offers and effectively cross-sell. Besides that, AI-powered analytics in popular marketing systems allow testing different marketing messages and campaign setups and optimize the campaigns accordingly. These and other AI applications in retail marketing can significantly boost marketing ROI, thus allowing your brand to gain a competitive advantage in the market.
Virtual Fitting Rooms and Trial Mirrors
To help shoppers make a buying decision, some virtual fitting rooms allow entering such details as height, weight and more details, and AI will help them see for themselves whether a chosen piece of clothing is a good fit for them. This solution can be applied for various types of products besides clothing, including shoes and cosmetics. Businesses are actively using this AI trend in retail to attract more customers and boost their engagement.
What Are the Benefits of AI in Retail?
If 2020 has taught us anything it is that companies that are willing to introduce innovation have higher chances of surviving the economic turmoil. A broad range of opportunities and benefits comes together with the application of AI in the retail industry. These are the reasons why this technology is worth implementing.
Better Customer Experience
Personalized recommendations, accurate pricing, loyalty programs, and other opportunities delivered with AI provide users with a new convenient way of shopping that they are willing to experience again. A great example of AI use in brick-and-mortar retail is Lowe’s AI-powered robots that help customers find products they need.
According to studies, the use of AI in retail can help the industry to save up to $300 billion. It includes savings on supply chain operations, marketing campaigns, sales activities, manufacturing, and more.
Efficient Data Management
AI-powered solutions help to collect, store, and analyze data on customers’ needs, warehouse supplies, and competitors’ behavior to enable efficient data-driven decision making. No valuable information will be missed out.
Improved Logistics and Supply Chain Management
Delivering relevant products to your customers when and where they need them is one of the key success factors for every retailer.
Precise Demand Forecasting
Forewarned is forearmed. AI helps you to accurately predict the changing market requirements and clients’ needs so you could adjust your strategy to fully meet your customers’ demands.
Increase in Sales Rates
The above-mentioned benefits will lead companies to the one and only thing they all desire — an increase in sales rates. AI enhances customers’ engagement and optimizes operations across the industry to drive ROI-oriented results.
What is the Future of AI in Retail?
Even though we see plenty of AI applications in retail now, this technology still has enough space and time to grow within the industry. It helps to automate time-consuming processes, get more value out of customers’ data, and build stronger relationships with clients, thus allowing your business to grow alongside the market demand.