By Kayla Mattews
Retailers, faced with changing customer needs and a demand for constant innovation, are looking to cutting-edge tech to improve their stores. Most modern businesses collect huge amounts of customer data. A lot of that info goes to waste, however. Artificial intelligence can analyze and apply that info in real time.
Retailers are starting to adopt the tech to keep up with the information they collect. Now, AI is having a big impact on retail. Here are four ways that AI is transforming retail experiences:
1. Demand Forecasting
Shifts in demand aren’t always easy to predict. If enough customers suddenly want a new product, retailers may not be ready to handle the new demand. In the worst-case scenario, mistakes in forecasting can leave stores desperately over or under-stocked.
AI demand forecasting looks for subtle patterns in historical sales data to predict future demand. Some predictive engines take into account even more than just sales data. Some, for example, also take into marketing campaigns, weather forecasts and holiday sales events.
By some estimates, AI demand forecasting can reduce errors in supply chain networks by 30 to 50 percent. As a result, customers are much more likely to find the item they’re looking for — even if it’s in high demand. AI forecasting can also reduce overall inventories by 20 to 50 percent, saving businesses on warehousing and transportation costs.
2. AI-Powered Marketing
Marketing is one area where AI is making a big impact. Companies collect more and more customer data every year. Much of this data, however, goes to waste. It’s too much, too fast for conventional analytic methods.
AI is capable of processing this data, sometimes in real-time, to improve retailers’ understanding of their customer base. For example, some new AI platforms help companies boost their recommendation engines. These platforms use AI to improve personalization and target customers with the most relevant offers and deals. Other systems are using AI to streamline their omnichannel experience.
3. Grab-and-Go Shopping
Amazon made headlines in early 2020 when the tech giant opened the first cashierless grocery store. The store is outfitted with a range of weight sensors, cameras and other devices that collect data as customers move through the store and pick up items. AI-enabled store systems then work together to provide a frictionless grab-and-go shopping experience. Customers use an app on their phone to scan in. They then move through the store as normal, picking up the items they need. When they leave, the store will automatically bill them for the items they grabbed — no check-out necessary.
These stores don’t need a cashier, freeing up staff to keep the store clean and stocked. They’re not open around the country yet, but Amazon has started selling the tech that powers these stores. Soon, more retailers may be able to open their own stores with Amazon’s cashierless tech.
4. Store Resource Management
Last year, Walmart rolled out new AI-powered tech at the company’s testing grounds for new tech, the Intelligent Retail Lab. Like Amazon, the company is experimenting with weight-detecting sensors and cameras that track products and other store resources.
For example, shelf sensors can detect if a certain product has run out. Cameras at the front of the store can see if the store is running out of available carts. The store’s AI-powered analytics system can process this data and send it to workers. With this data, workers can optimize how they keep the store running. Rather than comb the aisles for missing products or check the front for carts, workers can focus on other work, knowing they’ll receive a notice when resources need restock.
How New Applications of AI May Change Retail
These are just some of the applications of AI that are already in use. Other experimental approaches may soon have an even greater effect on retail.
Demand forecasting and AI-powered marketing are on track to become normal fixtures of retail management in the near future. More advanced tech, like smart or cashierless stores, may take longer to become the norm. If you live in a major metropolitan area, however, you’ll probably get a chance to see how that tech can change a customer’s retail experience soon.
Source: Independent Retailer, July 21, 2020 (https://independentretailer.com/2020/07/21/four-ways-artificial-intelligence-is-transforming-retail-experiences/)