The retail industry is facing quite some challenges to increase margins or revenues. Unsure of how and where to invest to generate maximum returns? To survive even the next five years in the industry, retailers must dive into the AI’s full potential to enhance the quality of retail product metadata.
Top Retail brands are embracing AI with Analytics to connect with consumers
Rapid revolution in the technology has already transformed many industries to benefit the consumers. Even retailers are embracing AI intelligence to shape their future and help consumers make more informed purchase decisions. Data-led insights are making their experiences richer, more transparent, more personalized, and compete more effectively with the digital pure-plays.
AI is everywhere, rapidly becoming the vehicle to address most complex problems while reinventing retail across product cataloging, customer service, merchandising, demand forecasting, pricing, and supply chain. Robotic sales representatives, chatbots, etc. deliver hyper-relevant experiences, boost customer engagement by answering inquiries based on personal information, and make purchase recommendations.
44% of consumers already use some type of virtual assistants like Cortana, Siri or Alexa.
One-third of these users use voice-based assistance at least once in a day and around 86% like the experience.
69% of millennials prefer chatbots to quickly interact with their favorite brands.
From customer insights to improved customer experiences – AI redefines delivery by offering a more relevant and more personalized experience. Big fashion brands like H&M, Mango and Zara use AI driven predictive analytics to delight shoppers by showing them things even before they realize they are searching for it. The next-gen technology helps them better understand consumer behavior, influence demand, and manage pricing as well as inventory.
Consumers already love the AI-enabled retail world. According to a recent study, 42% of the consumers feel it’s important for brands to set standards for service and engagement.
Are you speaking the same language as your millennial consumers?
Given the complexities of the AI, Data Analytics, and ML, many retailers hesitate to implement AI. Almost out of 11 industry groups, consumers believe retailers to be the last one to improve their ability to enhance the customer experience.
According to a leading market firm Tractica, AI-led revenues will see massive growth from USD 643.7 million in 2016 to around USD 36.8 billion in 2025. From this, the retail segment alone will see an investment of around USD 8 billion by 2024, according to Global Market Insights.
Thus in order to survive the next five years, retailers must dive into the AI’s full potential to turbo-charge their day-to-day operations, enhance customer relationships, reduce cost, and grow their business.
Till now, fewer than 20% of the retailers have deployed AI/ Machine Learning.
50% of the retailers with $1 billion sales have no specific function to work with new predictive analytics capabilities.
While implementing the new technology, almost 40% of the retailers lack data quality, skills, tools, or required leadership to be successful.
The impact of AI insights on the bottom line
AI in combination with Predictive Analytics and Machine Learning serves as a boon for retailers that gather and process consumer data. The AI ecosystem is not just for e-commerce brands, but it infiltrates physical retail as well. IT drives brick-and-mortar retailers from micro-segmentation to personalization, from responsive to more predictive commerce.
AI-powered processes become part of retailers DNA by connecting data from varied sources like browsing histories, Facebook, Pinterest, and Instagram, etc. It then provides granular insights into shopping behaviors and matches potential demand with product availability in real-time.
The Sears Auto Company in the United States has launched ‘Digital Tire Journey’ – an AI-enabled service that enhances auto tire shopping using an app. The intuitive application uses a set of questions to create a driver profile based on his preferences and driving behavior. It then recommends tires to match the vehicle and his driving performance.
Retailers can win the race of AI and Analytics by embracing the following AI value opportunities:
- Retail businesses should adopt augmented human effort with AI to transform their business processes.
- Embrace AI to understand real-time customer requirements and in turn recommend complementary products and drive impulse purchases.
- Apparel and fashion brands can create digital racks to enhance the shopping experience.
- Fashion stores can create virtual trial rooms to promote swift decision making.
- Even cosmetic stores and beauty brands can install virtual mirrors to help customers in swift buying using gesture and a touch-based interface.
- Deploy chatbots to engage customers efficiently.
- Retailers can now ensure the right product is available at the right channel at the right store via AI-enabled insights.
- AI-driven analytics enables advanced forecasting, planning, and supply chain execution
‘Around 40 percent of the retail activities performed by workers can be automated accentuating labor productivity across all functional areas.’
How AI can unlock the possibilities for retailers?
Learn from top brands in the industry how they implemented AI potential to redefine their shopper experience in 2019:
Use Case 1:
The popular French multinational retailer ‘Carrefour’ used AI driven analytics for demand forecasting. While running the system on an 18-month pilot, they could gather relevant data of their stores, online orders, and warehouse inventory. And then use the valuable insights to create customized algorithms to keep the warehouse stocked, but not in excess.
Use Case 2:
Much ahead of the game, Sephora launched AI-powered Color IQ products in its brick-and-mortar stores that scan shopper’s skin to suggest them relevant customized shade for foundations and concealers. This in-store AI optimization helped them increase footfalls while creating a more creative and unique shopping experience for every customer who walks in the store.
Start your AI journey today and redefine your retail business
Innovative retailers like Uber, Facebook, Google, Sephora, Olay, Amazon Echo, Tommy Hilfiger, and more have already implemented AI-enabled process to provide a steady stream of personalized content, prices, and interactive experiences.
Bridging the gap between online and in-person shopping with smarter technology in every step, these retailers are paving way for new opportunities to use AI for more agile innovation capabilities and operations.
AI-driven Analytics is still in its infancy so there is nothing like a perfect solution. But embracing it with a trial and error methods will move retailers closer to their customers and achieve their goals.