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Why you should invest in AI in the retail industry

May 17, 2022

AI in retail can help businesses optimize processes, uncover valuable market insights, and provide helpful support to store managers and associates amongst other possibilities.

Why retail is one of the leading sectors investing in AI

A study by Accenture  confirms that Artificial Intelligence could help increase global productivity by 40% by 2035. The report explains that such an impact of AI is based on the automation of low-level tasks thanks to new technologies. Companies are now able to solve way more complex problems in a shorter time with less resources expended. The retail industry is investing heavily in AI because it has positive effects on the performance of their business and it is a sure way to maximize their ROI.

The impact of AI on retail

Retailers are very pragmatic, the objectives of AI are directly linked to the improvement of their sales and for this it is necessary to rely on predictive analysis and therefore data. Based on a recent study by Octopeek, the need to deploy AI in e-commerce solutions is unanimous: for 100% of respondents it is beneficial, and is even considered essential for 67% of them. Practically, this 67% of retailers have already deployed or are already working on the deployment of AI in their ecommerce solutions.

Top 10 uses of AI in retail 

1.  Reduction in expenses:

Stores won't need to employ human cashiers anymore. AI will be able to handle everything. This will enable retailers to reduce queues and save on operational expenses.

2. Customer service:

Chatbots can take care of customer service. They can learn from previous dialogues and personalize their communication strategy for each person.

3. Price formulation:

To determine the best price for each product, AI can collect data which it can use to come up with various price strategies for the same item. The retailer can then test these strategies and choose the best.

4. Supply chain management:

Every year, retailers from all over the world lose around $1.1 trillion because of flaws in supply chain management and logistics. AI can be used to reduce these losses.

5. Voice search:

27% of people worldwide use voice search on mobile. Majority prefer this technology to websites and mobile apps. Retailers have also started to include voice search technology in their workflows.

6. Product classification:

This technology comes in handy for businesses that offer products by various manufacturers and sellers. A solution that relies on ML or AI can tag goods and sort them into different categories.

7. Visual search:

When searching for a particular product, a consumer can upload the image into an AI-powered solution which will suggest items of similar shapes, colors, or patterns. The visual search technology has over 90% accuracy and increases customer satisfaction greatly.

8. Customer behavior forecast:

During the shopping process, the customer expresses emotions and establishes behavior patterns. All this information is analyzed and AI comes up with suggestions that should motivate that person for more purchases.

9. Price projection

To predict the price of a product, AI can analyze demand, seasonal trends, release date of new models of the same item and this can help you to enhance customer loyalty.

10. Virtual trial rooms:

This is for companies that produce and sell clothes, shoes, or accessories. Consumers don’t need to try on dozens of items to detect which one fits best. A virtual fitting kiosk can scan their bodies in less than a minute.

Why does your business need AI optimization 

Being competitive today is not just about meeting your customers' needs today, it's about anticipating what they will need tomorrow. It is predicting their behavior, opportunities and risks. 

AI plays an important role on the table of prediction. It can be used to predict possible scenarios, the consumption patterns of the future and future needs or competition. Artificial intelligence predicts future behavior and this can give your business the opportunity to be best positioned to take advantage.

Conclusion

Knowing consumer preferences, anticipating customer desires and offering them the most personalized shopping experience possible: thanks to artificial intelligence (AI), retail is experiencing a real revolution. This concept when combined with data, makes it possible to improve the experiences offered by brands to their consumers.

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