Old-school marketing techniques that include guesswork held up by flimsy market research don’t always reflect what consumers want. But now retailers can eliminate the guesswork and incorporate real consumer feedback to gain a competitive edge.

Plus, Millennials are excited to work with robotscomplain to robots, and date robots, so it comes as no surprise that they want robots to help them pick out an outfit, an automobile, or a weekend getaway.

Whether it’s Amazon’s AI-fueled recommendations revolutionizing the product chain or the entire advertising industry adjusting to Google’s and Facebook’s algorithms, AI has been shaping the online retail space more than any technology besides the internet itself.

It will only get more important from here: A report from Research and Markets projects that AI usage in the retail market will reach $27 billion by the year 2025. (For perspective, it was worth just $700 million in 2016.)

Why is AI growing so quickly? In part, because it helps brands cater to their Millennial customers. This generation now makes up the bulk of the workforce, but they’re spending less than previous generations. Brands want those elusive consumers to gravitate toward their offerings, and AI helps achieve that goal by speaking their language.

Catering to a New Generation Requires New Solutions

The solution is simple to explain but hard to execute: Make the retail experience online feel as good as, if not better than, being in-store. The missing ingredient here is a voice. That’s a voice in a figurative sense (consumers should have their wants and needs listened to), a literal sense (consumers should be able to use language to direct their shopping experience), and a practical sense (brands need to have a clear tone).

Starbucks, which might speak Millennial-ese better than any other brand, has executed on this brilliantly. The company’s app lets customers use their own natural language to place their order before reaching the store. As Starbucks knows, convenience is key, and natural language processing is making ordering personal and comfortable.

Tech-Savvy Customers Expect Quality

This principle applies to commodities beyond pumpkin spice lattes, of course. Take clothing. In the stone age that came before AI-powered shopping, customers could scour a department store for hours, tearing through countless clothing racks only to discover that the item they were looking for doesn’t come in their size. Letting customers articulate their wants upfront is much more comfortable, and AI helps it happen.

In the techless shopping experience, customers could easily have their time wasted by a brand, which would make them less likely to come back. But AI provides an alternative: so-called “frictionless commerce,” which incorporates purchasing seamlessly into regular life.

A.T. Kearney found in a 2017 survey that brands are steadily turning to the personalized customer experience. Some brands can already initiate consumer-authorized purchases automatically based on real-time data from that user’s past behavior.

All of this is happening right now, and it won’t be long before customers come to expect this level of service all the time.

AI Will Keep Evolving

In 20 years, the concept of a grocery list will feel as old-fashioned as the Phoenician alphabet. Intelligent automation will even save customers the hassle of ordering products. Research has found that shoppers are predictable, and 83 percent of shopping trips end with a repeat purchase, which means AI can do most of the shopping for you.

Once AI learns a user’s cadence for standard purchases like bread or boxers, for example, it can automate purchases for those items after a given period of time passes from the last purchase. Based on a customer’s travel schedule, AI can offer suggestions to approve or deny an upcoming purchase that might come in handy on the trip.

Forward-looking companies have already launched this type of service. Amazon’s Dash Button enables Prime members to reorder their most commonly purchased products with one click.

And a service called Boxed Concierge, now being piloted, can automatically make bulk orders of frequently purchased goods. Hopefully, this technology will help reduce waste and encourage us as consumers to only purchase things we truly need in the right amount.

That means consumers will have more energy for the kind of shopping they want to do — and AI can also help with that.

Mark Baartse, the CMO of Showpo, an online fashion company, explained at Advertising Week APAC how his company is approaching AI.

“We are experimenting with having our visual merchandising run by AI, tailoring the clothes displayed differently for every user based on a range of intent signals. Using this technology, we help to improve the discoverability of products relevant to each individual user, which should improve the conversion rate.”

Smart, well-built AI can help people enjoy a continuous, transparent customer journey; there won’t be any more purchasing that misses the mark. That’s what this ascendant generation wants, so that’s what retailers should give them.

AI has changed a lot of industries, but retail might have the most to gain because the Millennial customer base is still up for grabs — and they’re responding to a whole different set of incentives than generations past. Purchasing should be a seamless, curated end result of the customer experience. Instead of dragging customers down with the retail strategies of previous generations, take the easy route and listen first.

Vince Lynch


Vince Lynch is CEO of IV.AI, a global AI company that helps businesses better connect with their customers. It processes 150 languages so all customers can be heard regardless of their origin. Clients include SMBs and larger companies such as Netflix, Toyota, Estée Lauder, Telefonica, and Capital One.