Artificial Intelligence (AI) opens up a world of possibilities for the retail industry, many of which are already offering monetary value to merchants. A study by Capgemini, a CRM company, predicted that AI could save retailers up to $340 billion annually by 2022.
It’s a highly efficient and cost-effective way of delivering an optimized experience for customers on a big scale. Personalizing customer experience, improving efficiency and accuracy, and raising the bar of customer satisfaction are among the list of benefits.
These types of automations are helping retailers keep up in Amazon’s world. Without AI, it’d be close to impossible for these retailers to stay afloat. Allowing for more efficient supply chains and returns, a more responsive customer-service model (chat bots) and accurate inventory; AI is changing retail for the better.
Matt Glickman, vice president of customer and product strategy at Snowflake, claims that all retailers are under disruption right now and have to develop a direct relationship with their customers. Speaking to eMarketer Retail Gliman says, “This disintermediation is critical to get data about your customers. With data, AI can be used to create customized recommendations and products, which is all expected from consumers today.”
Walmart has implemented the use of AI to help keep its shelves in-check. Using Bossa Nova robots, they can monitor price tags and missing items to make sure their in-store visitors are getting the best possible customer experience.
AI can offer support in the backend, but in terms of customer-facing roles, humans are still preferred. According to eMarketer Retail, 58% of consumers prefer to interact with a person over a robot in a retail environment. This suggests the future of retail will be a seamless collaboration of AI and human interaction. AI being used to monitor backend details on a large scale, and humans taking care of the more customer-centric roles. With both offering irreplaceable benefits, neither can outweigh the other.
"According to eMarketer Retail, 58% of consumers prefer to interact with a person over a robot in a retail environment."
Lancôme is now gathering data from customer profiles to display personalised make-up options in a range of shades close to the shopper’s skin tone, instead of displaying the whole range. The brand offers 10 foundations in 185 shades; by narrowing-down the options, Lancôme remove choice paralysis and encourages purchase. Similarly, if shoppers pick a shade of lipstick, it will give them automated recommendations for an entire look. This new feature hasn’t yet been rolled-out globally, but out of the 20,000 profiles that have been created, users have converted at 3 times the rate of those who haven’t created a profile.
The Guardian recently published a piece about the hidden cameras built into Westfields digital advertising billboards. Quividi, the French software firm that make the billboards, claim they can distinguish shoppers’ “Gender with 90% precision, five categories of mood from ‘very happy to very unhappy’ and customers’ age within a five-year bracket.” They cannot identify who that person is, just the characteristics of that person. This means they can then deliver tailored advertisements within seconds. Billboards in busy places are starved of attention as it is, with distracted shoppers rushing through crowded spaces. This type of AI helps them to attract and engage this inattentive audience.
"Out of the 20,000 profiles that have been created, users have converted at 3 times the rate of those who haven’t created a profile."
Helping retailers put customer data to good use, AI enables them to deliver targeted ads, give customers a more personalized online experience and help bricks and mortar stores run more efficiently. It helps to make a shopping experience more personalized at a quicker rate than humans ever could, and with minimum effort required by the customer.
AI doesn’t necessarily mean replacing humans, but can instead be used to assist them. Although many believe it will end jobs, it will also create jobs. Joe Lobo of the artificial intelligence firm Inbenta thinks it may increase job opportunities by expanding the job market to make way for AI.