Revamping the Retail Industry and Its Economy Leveraging AI
Implementing AI Solutions to generate revenue from Retail Businesses
The digital transformation of the retail industry has been ongoing for years. It has increased speed, efficiency, and accuracy across every retail business branch with the help of advanced data and predictive analytics systems that lead companies to make data-driven business decisions.
At the beginning of 2020, AI was anticipated to become a ‘key ingredient’ technology across many industries over the next decade. As the world is now deeply entrenched in the COVID-19 pandemic, the need to improve manual business processes with more automation through artificial intelligence (AI) has hit almost every sector with urgency, especially retail. AI in the retail industry has empowered businesses with high-level data and information, leveraging improved retail operations and new business opportunities. Around USD 40 billion of additional revenue was driven by AI in retail in the past 3-year span.
It is predicted that 85% of enterprises will adopt AI by 2020, and those who don’t risk losing insurmountable market share to their competitors.
Although the retail industry has a unique opportunity to learn from consumer behavior and implement AI solutions as per their requirements, AI implementation brings challenges. During the COVID-19 scenario, many organizations look up to AI for its promising efficiency gains to discover the lack of basic automation, product identification, and data quality essential for success.
Here are some practical ways retailers can leverage AI in combination with standardized, structured data to solidify their relevance and cope with digital transformation; even-after, COVID-19 is no longer a driving force in the economy.
Enhancing In-Store Experience
AI can automate in-store operations and curb operational expenses in retail stores. It can replace sales personnel to assist customers in the store, reducing queues through cashier-less payment. AI also can replenish stock by real-time stock monitoring and digitize store display and trial rooms.
For instance, Amazon has introduced Amazon Go and Just Walk Out shopping technology that responds every time a customer picks up a product from the store shelf. Kroger Edge technology has also been to cut down costs by launching smart shelf tags instead of paper price tags.
Flexibility of Price Adjustments
In a price-sensitive market such as retail, AI solutions can deliver valuable information for pricing strategy. These applications help enterprises analyze multiple pricing models’ efficacies before reaching the optimal price for their products. Retailers can also adjust prices by seasonal trends, competitive products, and consumer demand. If the long-term revenue it can generate is considered, it is undoubtedly an investment worth making.
Personalized Customer Insights
AI solutions in retail can offer a customer-personalized shopping experience. Technologies such as biometric and face recognition can detect customers revisiting a store and remember their likes and dislikes. Additionally, they can recommend products and design promotions for them. Advanced artificial intelligence algorithms can look into demographic data, social media impressions, and customers’ digital footprints to decode their interests. Boston Consulting Group’s study reveals, “Brands that create personalized experiences by incorporating advanced digital technologies and proprietary data for consumers are witnessing revenue go up by 6% to 10%, which is two to three times faster than those who don’t.
Effective Supply Chain Management
Retailers across the globe lose money every year due to inefficient inventory planning. AI-powered logistics management can speculate demands for products by scrutinizing historical sales, location, buying trends, etc. Recently developed AI-infused drones for warehouse management can reach tricky corners and update a central database automatically with available inventory in real-time. All aspects of the retail supply chain, from inventory to distribution and delivery, can be managed by implementing artificial intelligence.
Emerging AI applications can support consumers in the next normal if they have a data strategy and can be accepted universally by retailers. AI will scale with the dedicated collaboration of brands, retailers, and technology providers to implement technology effectively.
Artificial intelligence can transform every aspect of retail businesses. As AI replaces intuition with intelligence and provides retailers a vision for the future, business leaders need to be practical while implementing AI. The leaders also need to understand that it is a capital-intensive technology and shows results in the long run. An organization requires setting a long-term AI objective to ensure success.