Why is AI Retail Merchandising Essential for the Holidays?

Thanks to advancements like Artificial Intelligence (AI) - the driver behind the numerous success stories of modern retailers in today's digital-first world.
Why is AI Retail Merchandising Essential for the Holidays?

Retailers were already investing heavily in digital technologies to automate their existing services; in fact, many have already turned fully digital to attract and serve customers more seamlessly, and COVID-19 has further accelerated this transition. Thanks to advancements like Artificial Intelligence (AI) – the driver behind the numerous success stories of modern retailers in today's digital-first world. However, there is much more to AI and its offerings that we will explore in this article, especially its role in retail merchandising – both online and offline - and how it can drive growth for retailers during holidays. 

Consumers are in full throttle with the ongoing festive season and shopping like crazy online despite the pandemic's continuity. Retailers are aware of this trend, trying their best to bank on it by adopting AI throughout their operations, mainly enhancing efficiency, minimizing costs, unlocking new revenue, and providing better customer experiences. To understand the 'how' part, let's go through some of the live examples:

Online

Visual Product Discovery - For instance, several renowned retailers, Walmart's Hayneedle and IKEA, leverage AI to enable customers to show images and get similar products available on the platform. Not only has this innovation resulted in 50 percent faster checkouts compared to keyword search, but it has also increased the conversion rates of customers by 20-30 percent. According to Gartner, retailer brands that adopt this technology earlier than their counterparts, i.e., make their websites and apps compatible with visual and voice search will ramp up their online revenue by 30 percent. 

Faster Resolution of Customer Problems - Retailers face a massive uptick in customer ticket volume during holiday shopping seasons. And sometimes it becomes taxing to pay attention to each customer, understand their problems and provide them with the right solutions. Not doing so will only push customers to approach competitors. As a result, retailers have started using AI-based chatbots to scale up support functions and resolve customer queries faster and more seamlessly. For instance, Zinus, a mattress retailer, leverages an AI chatbot to instantly respond to questions related to products, warranties, cancellations, etc., eliminating the need for a human agent while increasing customer satisfaction and reducing costs. 

Offline 

Competent Customer Assistance and Inventory Management - Similarly, retailers are also augmenting operations on the offline front using AI. For instance, Lowe's, a global retailer brand, has incorporated a moving AI-powered robot LoweBot in its stores to assist customers. It can answer multiple basic questions that a customer might ask, too, in various languages. It is also capable of keeping track of the store inventory and accordingly updating and asking the staff to restock items. 

Seamless Customer Experiences - Coffee giant Starbucks has recently deployed its innovative conversational ordering system powered by AI – My Starbucks Barista, which allows customers to place personalized orders using voice commands or messaging while they are out or on the way home. This latest tech by the brand delivers unparalleled speed and convenience and transforms the way customers interact with Starbucks via their phones. Likewise, Sephora, a beauty and skincare brand, has launched an AI-based chatbot called Color IQ, which provides personalized makeup recommendations to customers before they try any samples by scanning their faces.

In Closing

The examples mentioned above clearly show how AI transforms retail processes from all angles and completely changes the way consumers shop online and offline. These innovations indicate the power of AI is helping retailers enhance customers' experiences by offering them the utmost comfort and convenience that nobody would have imagined a few years ago. AI has already proven to be a game-changing tool for retailers. Businesses that will effectively harness their power will be the winners, while others will struggle in this rapidly evolving business environment. 

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