It’s the beginning of the year, and, as they say – it’s never too late to start afresh! Or, in the case of most businesses today, to realign strategies and processes to stay ahead of the curve in an increasingly competitive, rapidly digitizing world. With this being the recurring theme over the last few years, enterprises across industries are on a quest to figure out how best they can kickstart or enhance their journey towards automation. The advent of new and advanced technologies like AI, ML and Big Data is making this all the more necessary, but also easier than ever before for businesses of all types and sizes. The retail space, in particular, is met with the challenges that arise as part of being a highly fragmented, volatile space.
However, even as e-retail is booming, traditional stores continue to exist. Shoppers buy from where they wish to, in the moment – a metro journey home may lead to an online purchase via one’s phone, while the short walk home may mean stopping by at the local store to stock up. Additionally, they may prefer one store or one brand over the other, depending on the kind of product they are looking for. This is where bringing in AI to deliver a standardized and complementary experience across channels is helping retailers put their best foot forward, both online and offline.
As per a report by Tractica, it is estimated that, by 2025, global revenues can increase to 36.8 bn, with the help of AI and automation. This is a huge leap up from the USD 643.7 mn that these figures stood at in 2016. Let us look into some of the ways in which AI is helping retailers organize and monitor inventory, study consumer behavior more closely and innovatively enhance engagement through automation.
Using AI-powered surveillance and tools to analyze consumer behavior:Gone are the days when CCTVs were only used to keep check of what’s happening inside a store. With AI-powered surveillance combined with computer vision, retailers can use the recorded material to take a deep-dive into consumer behavior. It can help them understand how consumers react to, and engage with a particular store layout/format. When ML tools are fed with sales data from the store, they can identify patterns in buying preferences to narrow it down to most-bought items or types of items each consumer buys.
Using this information, AI can suggest where and how to place certain items in the store to get consumers to buy more.For instance, H&M uses AI to study receipts and returns from in-store purchases for particular stores. Using the algorithms, it is able to identify which items to stock more of, depending on the location-wise demand. This helps them optimize processes witha better understanding of customers’ needs, leading to higher engagement and more positive conversions.
Trial ‘rooms’ on your device:Virtual trial rooms powered by AI are becoming an increasingly popular feature for retail brands, from apparel and eyewear, even cosmetics. Equipped with digital mirrors, they let users ‘try on’ different clothing or accessories with the tap of a button, helping them assess more looks without having to wear them, thereby saving time and possibly leading to more purchases. Sephora is one such brand which is utilizing this technology to help consumers find the perfect makeup shade without actually applying the product.
The brand uses tools called Color IQ and Lip IQ, where the former scans the customer’s face to give tailor-made recommendations for foundation and concealer, while the latter does the same with lipstick shades. When customers get the right shade with the help of this tool, it eliminates the bother of trying or buying several types, making for increased customer satisfaction and, thus, brand loyalty.
Chatbots for smarter customer service: Chatbots, powered by AI and ML (natural language processing) are proving to be one of the simplest tools for retailers to elevate customer engagement. Fed with predetermined data according to the particular need, chatbots are able to hold human-like conversations via chat and are available 24x7. Their automated nature also gives them the ability to hold thousands of conversations at a time to address basic customer queries. These tools become smarter over time, and can be programmed to answer questions, provide tailor-made suggestions and even assist customers through the purchase cycle, all in real-time.
When a customer support situation requires human intervention, bots can also redirect consumers by alerting an agent who will take the conversation forward, thereby providing a holistic resolution without having to wait on hold or in a line. Taco bell effectively uses AI to help consumers order food with its ‘Tacobot’.The bot works with Slack messenger and lets customers type out or dictate their order, with options to customize the food as well as the quantity for larger groups. Taking the engagement up a notch, the bot is also programmed to respond with witty responses, making it a fun experience for anyone who is ordering.
These are just a few examples of the innovative ways in which retailers can leverage the power of AI. The technology is applicable across business functions which involve data, helping enterprises extract valuable and actionable insights which can be implemented across channels. It can be used for backend and frontline functions alike, to streamline processes, bring in more creativity and unlock additional revenue at each step.While there are several AI systems and tools available in the market, it is up to retailers to do their homework to see what is best suited to their business strategy and goals, tweaking them accordingly along the way. Once this strong foundation is established, AI’s adaptable nature will empower them to create unparalleled customer experiences across channels in a sustained manner.
The article has been penned down by LK Sharma, Director: Head of Technology, Big Data and Business Intelligence, Absolutdata