The retail sector is known to be quite cautious when it comes to adopting new technologies, and this is no different with artificial intelligence (AI). In a labor-intensive industry, retailers have to weigh the impact automation can have on jobs, as well as the investment required in the infrastructure, although AI has already proven itself as a stellar support system for retailers in these areas.
The transformation of customer experiences, management systems, and daily operations has elevated the way retailers compete in a manner that’s beneficial for both consumers and themselves. Leveraging AI has created smart processes, inventory transparency, and improved personalization that have enabled retailers to respond to changes in consumer behaviors in real time and increase their bottom line.
AI-Driven Retail
It started with automation of tasks to improve efficiency and reduce costs, but AI has gone on to completely enhance retail logistics and the shopping experience.
Recommendation and personalization engines powered by AI algorithms have enabled retailers and e-commerce platforms to suggest products to customers based on their browsing history, purchasing behavior, and preferences without the use of intrusive data inputs. Along with the integration of AI and augmented reality/virtual reality (AR/VR) technology, we can now sit on our sofas and peruse only items of our interest for a completely customized shopping experience.
We even see AI-driven supply chain management systems integrated with intelligent fulfillment centers to avoid out-of-stock situations that can frustrate consumers. AI models analyzing and learning from various factors, such as inventory levels, order volumes, delivery routes and purchasing behaviors, are providing seamless logistics experiences to retailers. It has enabled retailers to predict stock requirements during peak and nonpeak seasons.
E-commerce platform providers are integrating AI not only to improve the efficiency of product discovery through image recognition search engines, but also to support self-sufficient brick-and-mortar stores and other tech tools to optimize operations. AI automated self-checkout and payment tools use computer vision, sensors and AI algorithms to streamline operations, reduce overhead, and ensure efficient product availability.
These enhancements help retail chains achieve their environmental, social and governance (ESG) goals by reducing waste and minimizing carbon emissions. This AI-powered sustainability can make a positive environmental impact for the future.
What’s Next for AI in Retail?
A store where all you have to do is walk in, pick up items, and walk out, with items automatically being checked and charged to your account, already seems like the epitome of AI in retail. However, I believe it can still go further.
I think retailers will look at further integrating AR platforms with AI algorithms like they have been doing. Their customers won’t need to carry shopping bags or move carts around while shopping in-store anymore. Instead, they’ll walk around holographic aisles and choose items that will be ready for them to receive at checkout.
AI has disrupted the traditional retail model and is now in the process of renovating the sector. The boost in profits and engagement have made retailers more curious to know what else AI is capable of, with the retail sector predicted to invest more than $31 billion in the technology by 2028.
There’s no doubt that AI has changed the retail game for the betterment of both retailers and consumers. It will be interesting to keep an eye on this sector and see how it evolves in the coming decade.
Vrushali Prasade is the co-founder and co-CTO at Pixis, a company that develops accessible AI technology to help brands scale all aspects of their marketing in a world of infinitely complex consumer behavior.
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