AI is starting to play a much bigger role in retail. Use cases are moving beyond improving efficiency and reducing costs. AI-driven solutions are maturing as digital-first retail becomes the norm.
From 2020 and beyond, AI will continue to blur the lines between e-commerce and brick and mortar. And, it will introduce ways that leverage and augment the human element in retail.
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How AI is Transforming the Customer Experience
In a report by Capgemini, 25% of the top 250 global retailers already integrate AI into their organizations. AI penetration is highest in multi-category (42%). Followed by apparel and footwear (33%), food and grocery (29%) and home improvement (26%).
By 2022, Juniper Research revealed that global retail spending on AI will grow to $7.3 billion per year from $2 billion in 2018.
E-commerce players and retailers worldwide are increasingly using AI in customer-facing functions. They expect to enhance customer satisfaction, increase promotion efficiency, reduce customer complaints, and churn.
With advancements in machine and deep learning, what will the online customer experience of the future be like?
Seamless omnichannel experience with IoT
For 88% of retailers, using the Internet of Things (IoT) in retail will provide better customer insight than any other data gathering method, according to Oracle. For instance, the use of RFID tags and GPS sensors that power smart shelves and mirrors allows retailers to get a granular-level understanding of the customers.
AI-powered IoT will enhance the e-commerce experience of customers. It is expected to deliver dynamic pricing and personalized recommendations based on previous shopping behavior both online and offline.
Operational optimization and predictive inventory management
AI enables data gathering and analysis at scale. This allows retailers to optimize operations such as stock replenishment and inventory management.
IBM and NRF found that 85% of retailers plan to use intelligent automation for supply chain planning by 2021. In the same period, 79% of retailers expect to use intelligent automation for customer intelligence.
Armed with actionable insights, e-commerce players will be more efficient at forecasting demand, managing space for stocks, and showcasing the availability of products to shoppers.
Adaptive, device-responsive, dynamic outreach
IDC predicted that by 2019, “40% of retailers will have developed a CX architecture supported by an AI layer. Providing up to a 30% conversion increase and thus up to 25% higher revenue.”
Hyper micro-personalization in e-commerce has a lot more room for growth. And AI is giving the push toward its widespread use.
Besides the increasing focus on making e-commerce mobile-responsive, AI will help retailers deliver real-time, contextual engagement. From highly tailored rewards to relevant marketing campaigns, based on a detailed consumer profile.
Conversational and guided product discovery
According to Sonar, 70% of US millennials, and 62% of millennials in the UK, appreciate retailers using AI to show more interesting products. Also, 72% and 64%, respectively, believe that brands using AI will be able to accurately predict what they want.
AI-powered visual search supports a smooth product search experience. It eliminates the difficulty of finding the right keywords. As a result, retailers can enable shoppers to find products with only an image.
Couple visual search with conversational and guide tools, and e-commerce will be able to offer a 360-degree approach to online product discovery.
The digital world offers consumers new ways to shop, altering behavior and expectations. As AI further develops and matures, now is the time for e-commerce players and retailers to innovate the customer experience.
Combining AI with the right customer-centric strategy is a strong competitive foundation as the retail revolution advances.
