AI use cases in retail industry

The Future of Retail

Artificial Intelligence (AI) in retail situations is becoming more prevalent. Traditional retailers tend to look at it as somewhat inaccessible for them because of the nature of their business. Online retailing will get a tremendous benefit, but brick and mortar establishments won’t be left in the cold.
Soon, the first-person encounter with a retail employee will evolve into interactions with AI smart terminals located throughout the store. They’ll possess cameras and be able to interact with a customer. It will be able to see when customers hold their hands about 18 inches apart and hear when they say “it was about this big, and blue, and had lace all around the edges.” It will be able to ask insightful questions and find matching inventory.

Using NFC (Near field Communication), it can provide a smart map on the customer’s digital device with just a tap, taking them to the exact location in the store to find the product. Better yet, with the efficiency and constant improvement of language translation, automatically switching to any language would present no problem at all.

Eventually, we’ll head down an even more interesting technological road. In countries like Japan, where everybody is enamored of robots, they already have speaking, seeing, emotion interpreting, interactive automatons, desk attendants, and hotel check-in clerks or ticketing agents at airports. So far, most are female-looking, because women are thought of as being friendlier.
If you’re heading over to Japan for a business trip, the airports are often quite busy. You might be met by a ‘droid instead of a person, to help you navigate to your waiting car. Such a device can wait patiently, forever, if your flight or customs clearance is delayed.

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In other words, don’t be dismissive of new ways to interact with customers, or think of this technology as being “50 years down the road”. It is already here and in use. For further evidence, check out Pepper, the AI Brand Ambassador that boosted sales and foot traffic for a couple of California stores. You get a lot of sales generated from a 4-foot tall robot. People invariably seemed to enjoy interacting with the clever `bot.

Need more? Domino’s Pizza has already rolled out autonomous delivery units in Australia, New Zealand, Belgium, France, the Netherlands, Japan, and Germany, delivering hot foods hot and cold foods cold.
Granted, they currently cost $100,000 each, but sometime in the not too distant future, this is going to be commonplace. We’re raising a generation that’s going to ask “How did they do it before?”

The Road Ahead

For the time being, we’re stuck mainly in advancing our cause with online retailing while we wait patiently for the robots to arrive—they’re still quite experimental, but improving daily. In the meantime, giant retail chains possess a significant advantage because they already have data scientists working for them, as part of their broader operation.
Here’s the surprise—Walmart, Best Buy, and other megacorps are not progressively seeking AI solutions. It seems their board members are old, stodgy, and reluctant to embrace something without firm “bottom-line” figures.

Time for the Little Guys

Turning their attention to AI-powered enhanced customer service would be a relatively small step for multinational retailers. However, even the smaller retailer shouldn’t be dismayed because this is the chance for them to pull ahead of the cowardly giants. Maybe you can’t afford a dozen data scientists at $100,000 per year, but there are alternatives.
You have probably all heard of SaaS (Software as a Service), PaaS (Platform as a Service), IaaS (Infrastructure), BDaaS (Big Data), among many others. Now get ready for AIaaS, or

Artificial Intelligence as a Service

AIaaS is already well established, particularly in Europe where interest is high. Almost 38% of AIaaS is dedicated to customer service tasks, 11% for Finance and Accounting, and about 8% to actual production. When you automate customer service tasks, just like any other business, people don’t have to wait for service. Those employees who were answering the same question over-and-over again can now focus on complex questions that genuinely require their attention.
As an example, a single ChatBot can conduct as many parallel conversations as required (or that you can support with your internet bandwidth) so that no customer ever has to hear “Thank you for holding. All our service agents are busy. Wait time is approximately 33 minutes”, ever again.
The alternative to that nonsense is to log onto a website and type you questions. The most advanced systems allow you to speak and hear responses, since most every currently available computer comes equipped with microphone and speakers, and smartphones were seemingly made for this particular advance.
In fact, you’ve probably interacted verbally with a preliminary system without giving it a second thought, as when you’re inquiring about an account balance with your bank, or local utility, or Cable Company. It says “Please use the number pad on your phone, or speak your account number.” Or in more sophisticated systems “Please use 1-5 words to describe the product you are looking for”. [Answer: radial tires] “Radial tires, thank you. I am now connecting you to the automotive department”.
Yes, right now it is rather brutish and preliminary for speech, but it will catch up to the level of the ChatBots in the very near future. In the same way that Cortana (Microsoft), Siri (Apple), Home (Google), Lyra (Android), or Alexa (Amazon) have become much more competent in speech recognition, interpolation, and response, these speaking and listening customer service automatons will become Expert Systems as far as your store inventory or service offerings are concerned.

There’s more…

Having a great relationship with your customers is paramount, but AI has more to offer with Deep Learning. Artificial Intelligence can mine your customer data to help you define particular customer “personas” that you can market to directly, and then it can run your marketing campaigns automatically. How is that possible?
The AI will thoroughly understand your customer base because it uses what is called a Neural Network to discover relationships. A Neural Network is designed to simulate the way a human brain looks at information, and how it is sorted. The difference is that although it is not nearly as complicated as a human mind, it is millions of times faster.

It builds these personas, which are determined by what they ordinarily purchase, at what time of year, what the weather is like, and dozens of other factors that make them distinct from any other customer. You simply let the AI access your inventory database telling what you have, what’s coming in, quantities available, and when specific items will be on sale. It can do the rest.

For Example

Imagine that you operate a greenhouse. Some customers will buy fruiting trees; some customers will purchase ornamental bushes; yet others might purchase sod, soil, fertilizer, flowers, cedar chips, gravel, or seeds.

Now when the “Rose Lady” receives her e-mail flyer, it may very well incorporate all the wonderful things you have to offer, but the first page is covered with all the different varieties of roses you have on sale. This is not possible for a mortal being, but an AI could handle the task with ease.
You could have either a generic class of rose-buyers that receive that particular e-mail design or you could even go as far as to have the AI customize a flyer for each recipient. One New York-based company starting out with AI directed e-mail campaigns (Adore Me) reported a 15% growth in monthly sales compared to control groups in A/B marketing. They also discovered that each customer was ordering an average of 22% more per order. The truth is, it does work—it might take a little tuning to get it exactly right, but that is true of every new process.

In-person Shopping

Let’s say you operate an aisle-based store, whether it’s a Big Box, a local department store, or a grocery store. Someone with a tablet or phone, equipped with an appropriate AR (Augmented Reality) application would be able to merely look at their device, and the camera would show whatever it was pointed at, highlighting sale items, and displaying prices. Knowing their shopping list, it could show desired items, or favorites, even if it wasn’t on their list.
A customer who agrees to download the app could receive coupons (good for the day) when they walk in the store. This would be entirely driven by AI and their previous choices. A regular customer, even walking near the store, could receive a coupon by PUSH notification to their device, perhaps encouraging them to stop by and make a purchase.

Customer-ized Information

A more wide-ranging AI could provide details about what was happening in a selection of given stores—those that a customer regularly visited—providing useful information such as wine-tastings at a local liquor store, low room rates for people stuck overnight in the city due to weather, or sales on favorite products.

This “overseer” AI could comb local news and information, but by you specifically coordinating with it, that could allow it to highlight your products. If you suddenly have a cancellation and now hold 10 Phantom of the Opera ticketsunspoken for, the last Prius on your lot, or a Personal Chef with a dinner-for-two cancellation, an AI could get that information out in front of enough people to get your products sold…

The Takeaway

The coming AI revolution will require us to think about retailing in new ways. Whatever you’re selling, through whatever medium, you can sell it better, more reliably with the aid of AI. The most prominent retailers have an immense amount of inertia working against them. This is a very narrow window of opportunity for you to get a lead on them, no matter how slight.
Early adopters will benefit, but that doesn’t describe typical retail giants. By being fast, you’ll acquire experience and tactics for exploiting this new resource while they are still trying to figure out how it all works.
This is a significant evolution in the way we will do business from now on. If you want to learn more, we provide webinars to show you where the future is going and how you can get there. Don’t shortchange yourself. Join us today!