Why Should Retailers Invest in AI for a Connected Omnichannel Experience?

Phygital is the new normal, and successful brands will be the ones that embrace digital technologies much before others to deliver a flawless omnichannel experience to customers.
Why Should Retailers Invest in AI for a Connected Omnichannel Experience?

The pathway leading to India’s digitalization goalpost is potent with sheer numbers and a multifaceted impact on the economy. In 2021, 37.90 billion digital transactions were made by Indians, which is an increase of 27.9 billion from 2016, when UPI became popular, and around 10 billion transactions were recorded! 

Although all sectors are letting technology take the lead role in their operations, retail has been at the forefront of the brigade. Retail is one of the most competitive fields in the economy, and no matter how niche the market might be, it’s always a run to reach the customer first. And it’s not a linear race. It comes with many competitive aspects.  

Therefore, retail businesses have to constantly find new and more intuitive ways of engaging customers and establishing new brands. And with customers taking to multiple channels to shop, the quest for retail success only gets more complicated. 

In this scenario, Artificial Intelligence is the only strategy that can have an impact on all these aspects. Through AI, retailers can develop a well-defined omnichannel approach that will enable retailers to capture shoppers’ needs and requirements well before they are even fully evident to the shopper. 

AI in Retail for an Enhanced Engagement 

Industry watchers say that this is just the beginning of the new tide. Retailers in India are already powering their channels and marketing campaigns with AI. But how AI-based machine learning is used in the retail environment? 

One, it can be applied to understand what customers want specifically during their purchase journey. For this, the retail brands must differentiate between one-time purchase items and repeated purchase items. These insights will enable customers to reach out to their exact needs and optimize ad time and money for retailers. 

Two, retailers can reach their customers through the omnichannel approach, i.e., sending communication based on channel relevancy and frequency while knowing the purchase journey stage. To do this accurately, retailers need to integrate data across channels and analyze it to get the specific channel and purchase journey insights. 

Online shopping data is easily accessible as customer events, purchase journey, app/ website and channel activity, and more such aspects.  New channels (smartwatches and voice assistants) get into the shopping environment allowing retail brands to enrich their customer insights that much more. 

According to the second edition of its Insights Report by Airtel Business, titled ‘The Future Of Retail In India Is Both In The Store And Online’, “retail is at the intersection of changing customer behavior in the post-pandemic world and technology.”

The report says that Phygital is the new normal, and successful brands will be the ones that embrace digital technologies much before others to deliver a flawless omnichannel experience to customers. Soon, omnichannel will take up the best of both physical and digital worlds. The report says that physical stores will continue to have a special place in consumers’ behavior because they want the touch-and-feel in their shopping experience.  

Given this scenario, retailers find it hard to analyze in-store shopping data and behavior. They are trying to bridge this knowledge gap by integrating customer engagement and customer relationship management platforms. This is possible through AI-backed initiatives with its omnichannel analytics, and in turn, enhance customer engagement and provide a connected experience. As customers enter the new shopping mode, retailers have to make exact measurements of their campaign efforts across all touchpoints.  
In the future, brands will also opt for the use of MR (mixed reality), a blend of AR and VR. It puts virtual products in consumers’ hands to understand their response.

Thus retailers have to be on their toes and in the know of their customer’s every move. This requires considerable investments in terms of money, time, and effort in data science capabilities. In addition, video chatbots and real-time delivery yield impactful results.

The Greyhound Research’s Retail Priorities 2021 survey says that till March 2021, more than 50 percent of large Indian retailers started piloting IoT or at least have plans to apply it in the next year. 

How does AI Supercharge the Connected Experience?

AI delivers significant benefits to businesses, both externally and internally. It engages customers by transforming products and services. It also increases employee efficiency resulting in optimizing operations. In the retail sector, it helps:

To Appeal to the Intelligent Customer - Shoppers are intelligent and have come to expect a seamless experience. The assumption is that the retailer is available whenever and wherever they want on any device they wish to use.  In addition, they expect various channels to be connected. Advancements in AI and personalization allow retailers to make their engagement more efficient and improve customer experience. 

To Deliver Value and Experience - The perception of value has changed for young consumers who spend time hunting for deals and expect customized services from retailers. Retailers now have to gear up to deliver immersive and hyper-personalized experiences for customers that are also price-sensitive. 

Immersive Experience Through the Use of AR and VR - Immersive shopping experiences using AR and VR will create a physical store-like buying experience. This encourages the concept of social commerce that is getting leveraged for Direct-To-Consumer (D2C) efforts. 

A Goldman Sachs report pegs AR/VR retail software revenue at $1.6 billion by 2025. With VR/AR, the retail and consumer sector will boost the global GDP by $204 billion by 2030. The Indian Augmented Reality, and Virtual Reality Market stood at USD1.83 billion in FY2020 and is forecast to grow at a CAGR of 38.29% until FY2027.

Global retailer Ikea also has the Ikea Place ARKit app that gives users a 3D preview of the chosen furniture at a spot they want to place it.  

Helps Build Borderless Commerce - Retailers must build different digital forms to tap future growth opportunities and serve customers with a connected experience that is location-agnostic. This is possible through geo-fencing, an app or software program that uses radio frequency identification (RFID), Wi-Fi, GPS, or cellular data to push a text, email, social media advertisement, or app notification at the exact time the mobile device or RFID tag enters or exits a geo-fence, which is a virtual geographic boundary. 

Say, for example, when a young woman walks near a popular retailer like Nykaa. She will immediately receive an app notification that suggests relevant offers like ‘Buy one, get one free!’ then, it is geofencing in use.   

It Helps Move from Mass Personalization to Relevant Personalization - Borderless commerce will work when retailers ensure personalized experiences and not just customized communication. So, irrespective of the customer touchpoint, the brand has to build capabilities to measure the interactions and apply data analytics through the entire customer journey to get them hooked to their brands. And it doesn’t stop there. The results of the analytics are utilized to optimize the campaign making it more effective. AI-powered language optimization is one of the tools often used to send the right message at the right time to the right person. 

AI-based engines can also make product recommendations that can motivate casual shoppers to purchase, handhold  ‘lost’ customers to find items they require, and prompt big shoppers to shop for more. 

Product recommendations ensure customers do not get lost in the vast array of offerings and identify issues like abandonment, dissatisfaction, and cognitive dissonance.

In the future, brands will also start using MR (mixed reality), which is a blend of AR and VR. It puts virtual products in consumers’ hands to understand their response.  

AI helps harness technology to supercharge a retailer’s marketing efforts by offering a connected experience to the customer. 
 

The pathway leading to India’s digitalization goalpost is potent with sheer numbers and a multifaceted impact on the economy. In 2021, 37.90 billion digital transactions were made by Indians, which is an increase of 27.9 billion from 2016, when UPI became popular, and around 10 billion transactions were recorded! 
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