It is no secret that AI has revolutionized the retail industry. Since its inception, it has transformed almost every sector of this industry. AI is undergoing improvements every day, increasing the chances of growth for every business utilizing AI. A couple of decades ago, AI was a dream that has now materialized. In a matter of years, any retail business that doesn’t climb up the AI bandwagon will most likely become just a part of history.
No matter which part of the business we talk about, be it customer service, strategies, security, or marketing, AI has revolutionized how we do commerce.
This post, however, will focus on how AI has reshaped the retail market. We’d also discuss the rise of AI, what it is, why businesses are quickly adopting this incredible technology, how AI changes customer standards, and what’s the future of this technology. So, without further ado, let’s delve into these topics.
The Rise of AI
AI stands for artificial intelligence. Going back to history, the fathers of this technology, Minsky, and McCarthy predicted how artificial intelligence will change the world. This news took the entire industry by storm. According to them, AI was going to replace human intelligence with machine intelligence.
The modern definition of AI describes it as the ability of a machine (which could either be a computer itself or a robot controlled by a computer) to perform those functions that were only possible with human intelligence.
As AI started developing, the world witnessed innovations every day. Today, the dream has come to reality. When Apple Siri directs its user to purchase something, or when we see a self-driven car, AI has evolved right before our very eyes.
In the past decade, every industry has gone through breakthrough changes. Case in point: the extensive use of robots in the manufacturing industry or the advancement of healthcare by using artificial intelligence. These groundbreaking innovations were all made possible thanks to AI.
Why Retail Businesses are Turning to AI
As mentioned earlier, AI has changed almost every industry, including retail. This is why it has become indispensable in the retail industry. From online giants like Amazon to their offline counterparts like Walmart and Target, retail businesses are turning to AI. Here’s why:
1. It is Reliable
When it comes to reliability, nothing can beat AI machines. They are far more reliable and efficient than humans. It goes without saying that if you need them to work 24/7, they will do it. Unlike humans, these machines do not need eating time, sleeping time, or even yoga time.
Businesses don’t have to deal with work breaks and sick leaves with these machines, making them much more reliable than a human. They can also process data in a matter of seconds and take on work that takes humans ages to accomplish.
2. AI has improved Customer Services Over the Years
AI has drastically changed customer service over the years. Customer care, in this age, is the marketing backbone of any business. Retail business owners are well aware of the paramount importance of customer care, so they are choosing AI over human intelligence.
Bots can take care of chats, phone calls, and emails without taking a break. They have sophisticated vocabulary developed through years and years of language data. Their useful assistance builds trust, which in turn, garners customer loyalty to the business. Some ad targeting software nowadays even use AI to identify the target audiences more effectively.
3. It Enhances Productivity
Experts suggest that AI works as an aide-de-camp for employees. In the presence of AI, employees can share their workload with bots and concentrate on their own tasks. This, in turn, helps them become more productive and show better performance results.
The Best Examples of Using AI in Retail
AI is ubiquitous in today’s retail industry. Here are some examples of retailers that are making efficient use of AI in their business functions:
- Sephora Uses AI to Recommend Makeup. Popular makeup brand Sephora uses AI to recommend makeup to its customers. For some women, finding the correct makeup for their skin type and complexion can be a challenge. Color IQ scans their face and recommends foundations and concealers accordingly. LipIQ is also a part of the ColorIQ technology that scans the lips and suggests a suitable lip color.
- LOWES uses LoweBots to Find Items. Locating items in stores can be a back-breaking task for customers. This is where LoweBots come in handy. In the LOWES stores, these bots roam around and give directions to customers. They will keep inquiring about what you’re trying to find and assist you based on the answers you give them.
- North Face Recommends Coats to Customers — North Face uses AI to suggest coats to its customers. The customer only needs to tell the event details to the bot, and it can figure out which coat will best suit the occasion.
- Walmart Uses AI to Monitor Inventory — Walmart is one of the earliest retailers to adopt AI for managing its in-store inventory. The sophisticated bots scan all the aisles to see the level of inventory. They send notifications to the store’s warehouse to replenish inventory whenever needed
How AI is Setting New Consumer Standards
AI plays a vital role in setting new consumer trends and standards. Consumers do not need to struggle hard to find products anymore. In the past, consumers often had to go through a dilemma to find out what they were looking for.
Now, AI keeps track of their previous searches and recommends a product even without the customers asking for it. It just hits the nail on the head, as the customers now don’t have to see those unwanted ads anymore. Since AI-fetched ads are more relevant, they become more engaging rather than annoying for customers.
Social media users have also experienced the magic of AI. How often do you see a product on a social media platform when you just searched for it on Google? Almost every time. These targeted ads recommend to consumers what they actually want. If many consumers like the product, the product becomes a new trend.
AI also identifies consumer behavior towards a particular product and helps companies know whether it’ll sell or not.
The Future of AI in Retail
The future is definitely bright for AI in retail. Even with so many benefits already proven, the technology is still in its infancy. We are the first generation to see the magic of AI. The fact is that AI has just started, but the next decade or two will show its full potential.
Even in its infancy, many retail companies are reaping its benefits. They now formulate their strategies based on consumer behavior. While AI keeps evolving, we can expect it to automate more and more aspects of the retail industry for years to come.
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