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12 benefits of Artificial Intelligence (AI) in retail

12 benefits of Artificial Intelligence (AI) in retail

Artificial Intelligence (AI) has begun to revolutionize the retail sphere. AI-powered solutions help companies optimize their business processes, enhance customer satisfaction, boost their sales, and maximize revenues.

From this article, you’ll get to know how exactly retailers can benefit from AI. All the technologies that will be described already exist. Businesses that managed to integrate them earlier than their competitors have made a lot of money from them.

1. Reduction in expenses

Stores don’t need to employ human cashiers anymore. When you take something from the shelf, AI takes a note. When you leave the store, the price of your purchases will be automatically deducted from your account. The robotization of stores enables retailers to achieve the following goals:

  • Reduce queues
  • Decrease the number of human employees
  • Save on operational expenses

However, human staff members won’t become redundant. They will need to supervise AI. Plus, some customers might feel more psychologically comfortable when there is human staff around.

2. Customer service

Chatbots can take care of customer service. Here are just a few examples of what AI chatbots can do:

  • Answer questions
  • Inform about discounts
  • Improve searching
  • Send notifications about new collections
  • Suggest similar or matching products
  • Gather feedback
  • Analyze the history of previous communications

Chatbots can learn from the previous dialogs they’ve had with each customer and personalize their communication strategy for each person.

3. In-store assistance

Consumers don’t need to ask human staff to provide additional information about the products. Retailers can replace paper price tags with smart shelf tags that offer descriptions of all items on sale. Smart shelf tags can also show video ads and inform consumers about promotions. When shopping abroad, consumers will be able to carry out the search in their native language. Besides, such an approach facilitates inventory management thanks to its real-time monitoring capabilities.

4. Price formulation

To determine the best price for each product, AI collects the following types of information:

  • Prices of other products
  • Promotional activities
  • Sales figures

Based on this data, AI can come up with various price strategies for the same item. The retailer can test these strategies and define the best one.

5. Price projection

To predict the price of a product, AI can analyze the following parameters:

  • Demand
  • Seasonal trends
  • Characteristics
  • Release date of new models of the same item

The price prediction feature should help you to enhance customer loyalty.

6. 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. Some products are out of stock when consumers need them badly, others expire before someone buys them. AI can calculate the demand for a particular product, taking into account the following aspects:

  • History of sales
  • Location
  • Weather
  • Trends
  • Promotions

AI can suggest how many units of the product the retailer should order and when.

7. Product classification

This technology comes in handy for supermarkets, marketplaces, and other types of businesses that offer products by various manufacturers and sellers. A solution that relies on machine learning (ML) can tag goods and sort them into different categories. It can process almost 1000 requests per second. When a consumer starts to search for a specific product, they can find it quickly and with minimum effort. A seller might be able to upload the image of the product they would like to sell and machine learning retail software with computer vision will recognize, classify, and suggest an optimal price for it.

8. Visual search

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

9. Voice search

27% of people worldwide use voice search on mobile. 52% of them prefer this technology to websites and mobile apps. Retailers have also begun to integrate voice search technology into their workflows. A consumer can name the desired item to purchase it. They won’t need to type in a single word to order the item and pay for it.

10. Virtual trial rooms

This technology is indispensable 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 and measure 200,000 points. Based on these measurements, it can suggest the items that will look the most stunning on the customer’s body. A virtual fitting room doesn’t only save the consumers’ time and effort — it also pleases their egos because they try on only those things that suit them.

11. Customer satisfaction tracing

Here is an example of how this technology can function:

  1. A retailer introduces a facial recognition system in its stores
  2. The system detects the mood of consumers as they walk around the shop
  3. At each checkout lane, cameras are installed
  4. If the system identifies that a consumer is annoyed at the end of the shopping process, a store representative will talk to them.

This technology enables retailers to build stronger relationships with consumers.

12. Customer behavior forecast

During the shopping process, each customer expresses emotions and establishes behavior patterns. AI analyzes this information and comes up with suggestions that should motivate that person for more purchases. The shopping process becomes highly personalized. Each consumer might be able to see only the promotional offers that will be likely to impress them. It’s a very efficient way of driving sales.

Final thoughts

Hopefully, this article came in handy and now you better understand the advantages of AI in retail. AI-powered solutions can replace human cashiers and support managers, provide in-store assistance, and take care of price adjustments. AI can predict prices, categorize products, work in virtual fitting rooms, and carry out voice and visual search. AI is indispensable for supply chain management and logistics, customer behavior prediction, and customer satisfaction tracking. The sooner you integrate AI into your retail business, the quicker you should be able to benefit from it.

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