Almost 20 years ago Amazon was the first company to employ artificial intelligence (AI) and benefit with 35 percent sales increase. Since then, AI has been developing rapidly and now can improve the productivity of the retail industry and, as a result, increase the income.
We have analyzed 10 applications of AI that can overhaul the retail business. Check them out below. You can also read this article on the future of e-commerce.
#1. Virtual Try-On Mode
Artificial intelligence makes it possible to create virtual fitting rooms to help online shoppers. They collect a person’s data for creating a virtual avatar that can try on different apparel and accessories. As shoppers usually return one-fourth of online purchases, such virtual fitting rooms are critical for online stores.
Some stores have taken another step forward by using Me-Ality body scanners. These devices quickly measure many different body parameters to create a precise and realistic avatar. You can already find these scanners at American Eagle, Gap, and many other brands.
#2. Robotized Stores
AI enabled the creation of checkout-free stores. They are highly robotized and require fewer employees and operational costs.
For example, Amazon managed to create supermarkets with just 6 human employees. In such stores, sensors detect which items were taken from the shelves, so AI can add them to the virtual card. This procedure allows the customer to leave a store directly after shopping and receive a receipt later to the Amazon account.
#3. Assistance in Store
Retailers in physical stores can also benefit from AI-driven technologies. For example, in-store assistance apps can provide personnel with valuable information about stocks and products. Two years ago, John Lewis invested £4 million in an app to help employees quickly browse item details and answer buyers’ questions.
#4. Chatbots for Individual Approach
Another popular application for artificial intelligence is chatbots. They can guide customers during online shopping, answer typical questions, send messages about new offers and even suggest supplementary items. That is the reason why about 80 percent of retailers are either already using chatbots or planning to involve them.
Furthermore, chatbots can communicate with customers via messaging platforms. A great example here is 1-800 Flowers. Their virtual concierge Gwyn assists customers via WhatsApp, providing a personal approach for every buyer.
#5. Pricing Strategy Algorithms
Artificial intelligence can help the retail industry with the price determination. Algorithms can collect different types of data such as competitors’ offers and sales, analyze it and create different pricing strategies.
Moreover, Al predicts possible incomes and outcomes so you can choose the best offer. Currently, many giants including eBay use such algorithms for flexible pricing.
#6. Eliminating Excess and Shortage in Supply
Each year, short supply or leftover stocks cause $1.1 trillion loses for retail companies. This is the reason why many companies use AI technology for restocking. H&M already uses it for demand prediction and inventory management. Artificial intelligence can determine the actual demand for each particular product, preventing companies from situations of excess or shortage in supply.
AI can predict the demand for items based on numerous factors, such as:
- sales history;
- weather conditions, etc.
Such an approach helps to eliminate overstocks, achieve high sales turnover and even provide faster deliveries.
#7. Classification and Categorization
AI can effectively optimize product classification. Machine learning can recognize and sort items based on different features and later show them to customers upon request. Furthermore, some companies even involve image recognition technologies into categorization.
Lalafo allows their customers to quickly find any product they want. All they need is to upload a photo of the desired product, and the algorithms will process it, find the appropriate category and show similar items. This innovation helps Lalafo to process more than 900 requests per second.
#8. Voice Recognition for Shopping Apps
Currently, many prominent companies such as Costco and Target have implemented the voice recognition technology in their search services. And your customers will appreciate such a convenient search method too. Instead of typing on small devices they can simply ask a virtual assistant to find the goods. AI-powered apps can respond to numerous commands like checking delivery status or reordering items.
#9. Keeping Track of Customer Satisfaction
Gathering customer feedback via surveys can be effective, but artificial intelligence can determine the actual feelings of your buyers. One way to do this is by using facial recognition technologies. Walmart equipped their stores with cameras monitoring customers’ satisfaction.
Shop Direct has chosen another approach. They invested in chatbot that determines a person’s mood analyzing their text messages. In both cases, when technology detects a disappointed customer, it informs employees of the need to determine problems and help with them.
#10. Predicting and Influencing Customer Behavior
Retailers can understand buyers better and even encourage them to purchase more with AI-powered software. A great example here is Personali, the platform that analyses customer’s shopping history to determine behavioral patterns.
Later, this data can be used to choose pricing offers and create recommendations personally for each particular customer. Such an individual approach helped Millets to increase their conversion rate by 332 percent.
For the modern retail industry, avoiding innovations is a big mistake. So, invest in AI today to advance your stores, gather valuable data and get more income in the future.