As the world is continuously moving towards a more digital approach, traditional retailers face existential threats. In order to level the playing field, storefront location retailers are beginning to turn to artificial intelligence (AI) as consumers are taking multichannel approaches when it comes to making purchases. Whether it be helping consumers find items through a visual aid to personalizing their entertainment experience, AI in retail is revolutionizing the industry in more ways than one.
Retailers are heavily investing in artificial intelligence applications to stay on top of the game. According to Retail Dive, the global annual spending on artificial intelligence by retailers will reach $7.3 billion by the year 2022
Why Artificial Intelligence (AI)?
According to a survey of 400 retail executives that was conducted by Capegemini
, AI could help retailers save $340 billion annually by the year 2022 by enabling efficiency in several processes and operations. Retailers are turning to AI applications for the following reasons:
- Artificial Intelligence applications are starting to become the go-to for retailers due to the efficiency it’s able to bring to the table from an operational standpoint, one of which is replacing humans. Human error is inevitable, but this technology significantly decreases inefficiencies that human error brings into operations by having repetitive tasks performed by automation with better performance. Forrester believes that artificial intelligence will replace 7% of jobs in the U.S. by 2025.
- By having AI technology, store associates are able to focus on high-priority tasks that require physical attention instead of wasting time doing unproductive tasks.
- Increased efficiency means an increase in profits. By reducing production and shipping costs to provide a more personalized customer experience, retailers are able to benefit from the AI technology. Tractica believes that artificial intelligence and automation can help increase global revenues from $643.7 million in the year 2016 to $36.8 billion by 2025.
How is AI in Retail Revolutionizing the Industry?
In a recent IBM report
that surveyed 1,900 retail and consumer product companies across 23 countries, 83% of these retailers plan to implement intelligent automation for supply chain planning by 2021. Retailers also believe that the introduction of artificial intelligence will result in 10% annual growth. There are many factors that will contribute to this success, here are four to name a few:
- Digital Assistance
Lowe’s LoweBot, which is also mentioned in a previous blog (Retail Design Trends: Stores of the Future
), is a perfect example of how robots are improving in-store experience and service. The bot is able to help customers find an item that they’re searching for and provide additional product information for the customer. Lowe’s first introduce LoweBot back in 2016 at their San Francisco locations. Customers are able to ask for products that they need LoweBot to locate through speech or through touch panels. LoweBot is also able to perform real-time inventory tracking.
- Better Customer Service
AI in retail has the ability to modernize the industry as we know it. By targeting consumers based on their purchase history and search behavior, retailers have the ability to hone in on this data to create a more personalized online shopping experience for their customers. Storefront location stores can also benefit from AI in a number of ways. You never know, the next time you visit a retail store you could be greeted by a robot instead of a sales associate where you can freely ask as many questions as you want to the robot. Because of this, the overall consumer experience becomes more interactive while the robots are saving a ton of time.
- Better Data Accumulation
Artificial intelligence helps retailers accumulate and organize a massive amount of customer data. AI in retail can calculate conclusions and create a more personalized shopping experience for users by using the data that it gathers. By having this data, retailers are able to create a more engaging experience for customers based on their behavioral interests, and also predict how well a product can perform in the market by learning from previous history to make better strategic decisions.
- Targeted Marketing Campaigns
By using AI algorithms, retailers are able to use the data to run targeted marketing campaigns by creating more personalized ads based upon the user’s region, preferences and purchase habits. Retailers are able to increase their conversion rate from 2% to 3% by creating more personalized campaigns to improve customer loyalty and retention. Retention Science (RESCI)
mentions that it’s very important to retail your customers, as 80% of future profit comes from 20% of your existing customer base.
Artificial intelligence is changing the face of retail in various different ways by representing the future of modern business. In order for retailers to stay in the competition, it’s time to put AI into action.
With these technology changes that are happening within various industries, we’ve seen a variety of different job titles in the mix that are a part of the technology driven decision-making process. Some of these titles include Marketing, IT, and Facilities Management, to name a few. National retailers choose Illumetek for program management and customer service, as we assist in the execution of installing lighting, electrical, Internet of Things (IoT) and controls into a variety of unique spaces.
If you work for a retailer looking to implement any of these things, we’re here to help you make that vision a reality! To get more information from technology installation experts, check out our Executive Summary
on how we can help you, contact us at firstname.lastname@example.org
, or reach out to some of our team members on LinkedIn