The global retail industry is buzzing with excitement, thanks to software powerhouses and digital market players focusing their resources on developing various retail applications including supply chain and logistics, product optimisation, in-store navigation, payment and pricing analytics, inventory and CRM. Retailers, who have long been reeling under the pressure of age-old problems such as inaccurate inventory, over/short supply, suboptimal pricing, lack of intelligent marketing or overworked and undertrained associates, are now implementing cutting edge-solutions to completely change the way retail was being looked at till now.
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The use cases of AI in retail are dynamic and diverse. From facilitating operations across production processes, optimising strategic decision making to enriching end-user engagement, AI powered technologies are making their presence felt across the retail ecosphere. In fact, such is its extent of influence that retail oriented AI is expected to grow at a CAGR of over 35% during 2018-2023.
How Is AI Impacting Retail?
AI essentially empowers the retail journey across 4 dimensions-Analytics, Interpretation of data to make decisions, building innovative marketing solutions and offering an unprecedented retail experience. Take the case of Sephora, the global cosmetic giant for instance. In an industry traditionally dominated by interpersonal marketing, Sephora leveraged cutting-edge digital solutions to serve unique customer experiences and take pole position as the top specialty beauty retailer in the world. Sephora offers customers a number of tech options to personalise their shopping experience by trying on makeup virtually using AR, matching their skin tone to a foundation with AI, to even sampling a fragrance via a touchscreen and scented air!
Retailers have long moved from being demand satiators to demand creators. It is all about being where your clients are, and offering services and products the clients do not even know they want yet. To attain both these objectives, futuristic technology remains the ideal tool. Buyer validation also exists to substantiate this statement: A recent Walmart survey revealed 70% millennial buyers in US and 62% of them in UK would like a brand or retailer offering any kind of AI technology to develop exciting products, services or experiences.
The Way Ahead
However, the most important aspect of AI as a transformative retail tool lies in the fact that it simultaneously serves the best interests of retailers in the management side of things as well. By maintaining precise data on supply chain, consumer demand movement, behavioural tendencies, to fluctuations in weather patterns or purchasing rates, AI-assisted technology helps retailers take the best possible operational decisions. In fact, recent bursts in offline spending by online retail giants such as Amazon and the launch of their tech-enabled offline stores such as Amazon Go show the interest these firms have in accumulating live buyer behaviour data through an offline experience to be utilised in making future business decisions.
Identifying patterns and making the right estimates-that is what Retail 101 has always been all about. But with AI making headway into the sector, retailers are looking to employ the technology to follow this adage in a way hitherto unimagined. By managing the entire numerical, data-driven aspect of retail beautifully, it has freed up retail merchants to be ‘imaginative’ and ‘creative’ again in order to better differentiate their products from the clutter. As it continues to open newer avenues and kinds of data for retailers to further enrich their retail decisions, one thing is for certain-to survive the intensely competitive retail domain of tomorrow, retailers need to jump on the AI juggernaut, now.