AI Will Revolutionize Retail – Here’s How

The retail industry is in a massive state of flux and business transformation. With customer habits changing and shopping trends shifting from high-street to the web, the retail sector has to adapt based on technological advancement or risk severe consequences. 

Already, a few retail giants have been forced to close shop in the wake of shifting consumer demand. Others, meanwhile, have adapted their supply chains to become more web-centric. And some have seen the light and are now heavily investing in intelligent automation technologies, including robotics, data analytics, logistics automation, and self-service technologies. 

In this piece, we will focus more closely on how Artificial Intelligence (AI) is going to revolutionize and disrupt the retail industry. 

The Potential Impact of AI in Retail

Experts believe that AI could save retailers over $340 billion annually by 2022. Last year, for instance, Capgemini surveyed 400 retail executives on the potential impact of the technology in retail and the findings were eye-opening. 

The respondents were positive that customer-facing AI functions such as chatbots and self-checkout would incredibly benefit retailers. About 9.4% of the executives feel that the features will boost customer satisfaction, increase promotion efficiency, reduce customer complaints, and, overall, reduce customer churn.

The following are some of the practical ways AI in retail will revolutionize the industry to bring about the above changes;

• AI in Planning and Scheduling 

A lot of work always goes into supply chain planning and scheduling. And to develop the right plans and schedules, you must collect data from other parts of the supply chain and analyze before making any decision.

The good news is that implementing AI in retail can help in many of these processes. First off, artificial intelligence in retail makes data collection and analysis a lot easier than manual methods. Secondly, with AI, some of the repetitive tasks can be automated to further speed-up processes and remove the risk of human errors. 

Above all, advanced AI solutions will allow supply chain managers to create precise labor forecasting with set priorities. AI also makes it a lot easier to auto-fill confirmed plans and comply with changing industry regulations. Even better, InfoPulse predicts that retailers will invest close to $4.5 billion in AI-powered planning and scheduling solutions by 2025.

• AI in Inventory Management 

The importance of inventory management in retail cannot be overstressed. The accuracy of inventory has a significant bearing on the success of the retail supply chain. And any obstacles or errors in managing the inventory can directly impact the chain and threaten the very existence of small businesses. 

Luckily, artificial intelligence in retail can accelerate various aspects of inventory management. For one, currently, most businesses check inventories manually. With AI solutions, you can replace these manual processes for faster, error-free inventories. Once automated AI processes take over the manual labor, the freed-up human labour can then be redirected to other areas of the business to spur growth.

New AI solutions can also be used to check, recognize, and restock inventory items. AI robots, in particular, can make use of IoT sensors and sophisticated algorithms to access inventory items and perform tasks such as restocking. The technology combining AI, IoT, and robotics is still at infancy stages, but you can see how it would solve challenges associated with manual inventory management. 

Also, AI will play a starring role in demand management. AI solutions can process data from multiple sections of the supply chain in real-time. Thus, determining how much of each item is needed in the store at any given time becomes easier. 

• AI in Customer Support and Experience 

On the other end of the supply chain, artificial intelligence in retail is also thought of as the ultimate savior in the quest for better customer experiences. Retail is becoming more and more about facilitating experiences. The ever-increasing competition means that you have to consistently wow your customers if you hope to see repeat purchases. AI could be the solution to this challenge.

Market leaders seem to know this already. According to a recent study by Infosys, almost half (46%) of retailers are embracing AI primarily to take advantage of the technology’s customer experience benefits. Another 47% of the surveyed retailers said ensuring customer satisfaction is their primary motivation. Up to 36%, meanwhile, are getting on board the AI train to identify new customer needs. 

The retailers already onboard use AI-backed solutions such as automated cash registers to reduce queue lengths. Some are also using robotics and automation systems to ensure that more orders are processed per hour. Then, you have a few stores already using automated carts to move entire storage units from narrow spaces to packers and pickers. Using automated carts allows for narrowing of shelve isles, a tactic that opens up more floor space for storage. That is how using AI in retail can be beneficial for your business. 

• AI also supports other critical retail technologies

One of the best examples here is cashier-free stores. Though most stores aren’t at this level yet, customers will soon walk into cashier-less stores, powered exclusively by technology. 

Much like driverless cars, cashier-less stores combine several technologies to make the customer’s experience more enjoyable. A smart application automatically identifies which products are taken or returned to the shelf. The items in shopping carts, meanwhile, are tracked by AI. When the customer is done, the amount due is automatically deducted from their debit cards. Amazon Go is one of the first cashier-free stores in the world. 

Another retail technology that will benefit immensely from AI is facial recognition. Retail developers use facial recognition to collect valuable data, such as age and gender. The technology is also used to track repeated customer visits and average time spent in the store. The data is then analyzed, and the results used to improve the customer experience. 

Combining facial recognition with AI will allow retailers to identify even more opportunities for boosting customer experience. Through AI, for instance, it’s possible to group buyers into categories as well as identify products they frequently buy. The information can be used to manage assortment and simplify logistics. 

Breakthrough with AI

Surely, you don’t need any more proof – AI is undoubtedly the future of retail as it’s  From planning and scheduling to inventory management and even improving customer experiences, the solution to current retail challenges lies in AI. 

Fortunately, here at NIX, we have a team of experienced IT experts who are capable of integrating cognitive technologies with AI-powered business solutions. Let’s talk today!