AI is fast taking over several aspects of our lives today, transforming how we interact with our phones, monitor our health, travel to our favorite hangout spots, and even take photos.
But what happens when you apply the transformative ability of AI to an industry most impacted by the pandemic: retail? Could it help keep afloat an industry on a downward spiral?
Better still, could it help it emerge from these trying times—stronger, and more successful?
Let’s find out.
The Problem with Retail Today
Much before the pandemic hit, retailers across the country were struggling to keep up with rising overheads, ever-increasing rental costs, and online shopping sites eating into their sales.
Things got exponentially tougher when Coronavirus came along. The nationwide lockdown meant brick-and-mortar stores were forced to down shutters for months on end. So, while sales went all the way down, the expenses kept piling up. Even after the restrictions were lifted, overtly cautious visitors still preferred the comfort of shopping through their phone screens.
With shopping habits clearly undergoing a change, it has become more apparent than ever that if retail is to survive this, some big changes are needed.
Here’s where AI can make all the difference.
Current AI Applications in Retail
Amazon Fresh was recently in the news for launching the first-of-its-kind store in Bellevue. This grocery store features the company’s “Just Walk Out” technology, where shoppers can place items in their cart and just walk out of the store without stopping at the cash register to pay for them.
All shoppers need to do, is wave their palm, scan a QR code in their Amazon app or alternatively, use a credit or debit card on entry. The same mode of payment needs to be repeated on their way out the door, and a digital receipt is sent to their Amazon account. Throughout their time in the store, sensors keep a track of what items shoppers are putting in and taking out of their carts.
Clearly, AI is already making waves across the world of retail. This is just one of the many ways it could help breathe new life into a stagnating retail industry.
AI-powered chatbots, self-checkout kiosks are becoming increasingly adopted to help revamp the retail experience.
But newer tech keeps popping up, promising more opportunities to revive retail.
Potential Scalable Applications of AI
Online shopping has enabled users to search for products across different sites to find the best-priced one. Recognizing this as one of the newest shopping habits, how can retail stores ensure they price their products optimally to allow them to meet overhead costs, while being able to compete with online stores?
You guessed it; AI is the answer!
By collecting information about products, promotional activities, sales numbers, and other data, AI systems can visualize the potential outcomes of different pricing strategies, presenting the best, most competitive offers to customers.
AI can also help with customer behavior prediction, allowing businesses to leverage behavioral economics to build a personalized approach for customers. By analyzing a customer’s emotional responses as well as past shopping behavior, the AI system can suggest tweaks to the prices of certain items, for certain users.
Remember at the start of the pandemic when stores were running low on supplies? That’s supply chain mismanagement, and that is a big problem with retail stores. Unsurprisingly, AI can help with that. By calculating the demand of products after taking into account weather, location, trends, and sales history, it can ensure this kind of mismanagement is a thing of the past.
Conclusion
The benefits of AI, from boosting sales to increasing customer loyalty, are clear for all to see. Will it be the life raft the retail industry so badly needs? With the right management, it certainly looks like the retail industry could be about to turn things around.
