Any retail expert worth their salt knows that personalization is the one true key to profitability. This is only becoming more important as the market grows saturated and customer expectations keep getting more demanding. But how will artificial intelligence technology change the ever-evolving retail landscape?
Personalization is all about providing engaging customer experiences, which is why it’s one of the greatest tools physical retailers can harness to wow and retain customers. AI can help marketers make personalization a priority, as doing so will both improve customer interactions and help brands stand out from their competition.
Retailers know that they must invest time and effort into understanding their customers’ needs, as impersonal shopping experiences can be frustrating and reflect poorly on the business as a whole. Customers have come to expect personalization. In fact, 71 percent of them report annoyance when brands fail to deliver it.
As Web3 tech is becoming more widespread and readily available, its emergence in the retail space cannot be underestimated. Augmented reality (AR) and virtual reality (VR) will enable retailers to create immersive and engaging in-store shopping experiences, which in turn can help bridge the emotional gap between the customer and their favorite brand. The global VR in retail market is projected to reach $5.455 billion by 2028. From VR showrooms for trying out different products while never leaving the house, to VR-based merchandising and advertising, and even VR-powered interactive packaging, Web3 technologies are quickly and radically changing business workflow and the reality of retail.
AI-powered kiosks can provide customers with personalized product recommendations much more easily and accurately than manual research could — and for a fraction of the cost, thus improving business profitability once again. That’s also true of AI-powered self-checkout systems equipped with contactless and mobile payment solutions, which themselves were thought up in response to a growing number of customers indicating a preference for digitalized payments.
The ongoing digitalization of the physical retail space will help businesses make decisions based on available data like real-time inventory tracking, personal shopping offers, and personalized shopping experiences with relevant recommendations and targeted promotions. And if you’re worried about privacy hang-ups, you might not need to be: While being careful about handling sensitive information is always key, 83 percent of consumers report their willingness to share data with brands in order to receive personalized experiences.
Additionally, the latest technology can help retailers gain a competitive advantage by improving employee productivity and significantly cutting overall costs. AI-powered employee training programs, for example, can help ensure HR costs remain competitive, while employing robotics for tasks like restocking and cleaning or leveraging IoT-enabled smart shelves for real-time inventory management allow physical store employees to focus on more personal tasks like in-person customer relations and sales.
Another excellent element to consider is the use of blockchain technology for transparent and secure supply chain management, which can help address many customers’ growing preference for sustainable and eco-friendly business practices. Blockchain technology can help retailers source products through ethical and transparent means, reduce packaging waste, encourage recycling, and prioritize energy-saving elements when it comes to store design and operations.
The world is changing quickly, and physical retailers need to jump on the AI ship to stay ahead of the curve and retain a competitive edge. AR, VR, and IoT-powered technologies can help retailers deliver on the promise of personalized customer experiences and expand their reach beyond traditional physical capabilities. As the number of VR, AR, and metaverse users grows every year, businesses can leverage these novel technologies to both retain customers and reach new ones, but most importantly, to ensure they remain at the forefront of innovation with every landscape change to come.
Daniele Servadei is co-founder and CEO of Sellix, an e-commerce solution that includes everything digital entrepreneurs need to create, grow and manage their online store.
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