How AI will benefit the Retail Industry in 2020

Retail, one of the most dynamic and fast-paced industries has been experimenting with frontier technologies like Artificial Intelligence, Machine Learning, data analytics to harness big data and gain valuable and actionable insights.

How AI is changing Retail in 2020

AI is essential for modern-day retailers to glean real-time customer insights as it is these insights that can empower businesses to deal with first digital natives tactically and strategically – GenZs, and the Millennials. Check out how AI will enable retailers to meet customer expectations in 2020:

• Cashier-free Stores: The expectations of current-day customers extend beyond the price and quality of a product. The list entails quicker order fulfilment, shorter wait times, personalized product recommendations & shopping experiences, frictionless checkout experiences, etc. With AI, stores can be robotized and made cashier-free. This not only helps reduce the strength of human employees but also increases savings on operational expenses. In fact, checkout-free stores are already a reality. Amazon AI is a real-time example of this.
  
  
• Visual Search: Although not a new trend, Visual search has been one of the lesser -discussed forms of search. However, the enthusiastic adoption of AI by retail giants to provide a more distinct and engaging shopping experience has brought Visual search to light in recent times. As per statistics, 62% of Millennials and GenZs prefer visual search to all other types of search (Semrush). Powered by AI, visual search allows customers to upload an image of their desired product and search for similar items based on shapes, colours, and patterns. For example, American Eagle, an American clothing, lifestyle, and accessories retailer, uses visual search to help their customers search-related products. It also uses visual search to suggest other items that may go well with a selected product.
  
  
• Voice Search: Voice search is no longer the future of retail, instead it is the present. Apart from providing better customer experience, voice search can also aid in improving revenue and store traffic. According to research, 27% of the people around the globe use voice search on mobile, in which 52% prefer voice search to mobile apps and websites (SPD group). Industry leaders like Walmart, Costco, Tesco, and many others are using either Google or Amazon AI technology to provide quick and simple voice search for their customers. Customers can now just check with Alexa about the availability of the desired item or the delivery status of a purchased item.
  
  
• Price optimization: With the help of Artificial Intelligence, retail companies can adjust prices and promotions effectively. AI can help retailers visualize the plausible outcomes of multiple pricing strategies. By evaluating the possible outcomes, businesses can fix the fairest possible price for their products. Even more so, AI can help in forecasting the price of a product based on seasonal trends, characteristics, demand, the release date of comparable products from competitors, etc. With these insights, they can also present the best offers at the right time. eBay and Kroger are already using AI for price optimization.
  
  
• Virtual fitting rooms: Another awesome application of AI in retail is virtual fitting rooms. With virtual fitting rooms, customers can virtually try out their new outfits and choose a perfect one within minutes. Customers will no longer have to wait in long queues for free trial rooms to try out their new outfits. Companies like Gap and Levi’s have already installed virtual fitting rooms in their stores and witnessed a massive increase in sales.
  
  
• Track customer satisfaction: 67% of customer churn can be avoided if companies resolve issues the first time they occur (Customerthermometer). Mood tracking is highly essential today to build strong relationships with customers and reduce customer retention. Artificial Intelligence can be highly instrumental in tracking customer mood during shopping. With the help of AI, video files from cameras that are installed in the store can be quickly analyzed to understand changes in customer mood and the factors driving it. Further, they can respond promptly and prevent themselves from losing a potential customer.
  
  

Wrapping Up

At a time, when the retail industry is fast-growing and consumer preferences have shifted to brands that offer experiences at a personal level, AI is of paramount importance for retailers to survive as well as succeed.