AI in Retail: What it Means

by sarah on Friday, 17th August 2018

2017 was heralded as the year of AI, with exceptional advances in artificial intelligence resulting in the application of a real-world AI presence in the retail stores of industry giant Whole Foods.

Followed by the implementation of AI in tech devices such as Amazon Echo and Google Home, resulted in a series of transformative industry-wide shifts in the way consumers shoppe for goods and services.

Artificial intelligence has continued to evolve and improve in 2018, with the creation of noteworthy innovations capable of facilitating vastly improved customer experiences and streamlined processing applications for the creation and marketing of products and services.

Renowned for its potential to create exceptional customer experiences, AI is currently creating and improving a number of tech innovations such as voice processing, augmented reality, machine learning, and much more.

Analysts predict that as much as 85 per cent of retail customer interactions will be facilitated by artificial intelligence by the year 2020, with roughly 3 per cent of global companies employing artificial intelligence to enhance their key sales processes.


While those analyst predictions have a long way towards coming to fruition, right now in 2018, AI is having an explosive impact on consumer experiences and industry practices.

IBM Watson Cognitive Computing is a supercomputer concept combining artificial intelligence (AI) and sophisticated analytical software for optimal performance as a "question answering" machine.

Capable of replicating (or even surpassing) the quality of a human’s ability to respond to questions with intelligent and coherent answers, Watson is composed of over ninety servers that comprise over two hundred million pages of stored information processed against over six million logic rules.

IBM’s Watson is currently providing a multitude of order management and customer engagement capabilities to eCommerce retailers and businesses across the world. A notable example is the launching of an AI “gift concierge” that handles the Gifts When You Need (GWYN) concept from Since the inception of the GWYN program, it’s been estimated that over 70% orders placed online were conducted through the gift concierge.

In addition to the well-known AI-driven programs introduced by Whole Foods, Google, and Amazon, there are countless small-scale applications and subcategories that AI is tasked with managing within the retail industry.

From Sales and Customer Relations Management applications to logistics and delivery, artificial intelligence is modifying, revamping, and at times, ultimately transforming the way that countless companies do business.

Customer Relations Management

Among the most cited uses by businesses for AI include the following:

• Manufacturing
• Customer Relations Management
• Payments
• Payment services
• Payment processing protocols
• Logistics and Delivery
• Customer recommendations

Many of these AI-driven business applicated have resulted in a significantly boosted return on investment, as well as helping businesses discover the problems and issues that need to be addressed before they can fully and successfully incorporate AI to join the rapidly increasing global business revolution.

By the end of 2018, AI manufacturers hope to have their retail products capable of greeting customers and subsequently produce individual-specific information pertaining to preferences, shopping history, and frequency of visits, as well as other important information.

Through this information, the AI apparatus will be able to make precise recommendations for products that are ideal for the customer, as well as offering them specialised coupons, various forms of discounts, and handling customer-service problems in an expedited fashion.

Indisputably, retailers and businesses would never be able to procure the copious amounts of valuable data on their customers without the implementation of AI technology. AI is a veritable instrument that obtains and drives companies to learn consumer preferences and subsequently lead them to efficient methods in conducting personalized engagement,


As retailers take part in the race to incorporate artificial intelligence to gain an edge on their competitors and remain relevant in today's technological times, the inherent benefits afforded by AI become increasingly apparent,

Importantly, artificial intelligence can provide a number of other beneficial functions to companies, whether they are established global corporations, smaller businesses, or even a tech-oriented startup.

Among the most important benefits is the ability of artificial intelligence to significantly reduce payroll costs by automatically processing data, gaining insight into that data, and modifying business processes that feature problems or issues.

Artificial Intelligence Benefits

Artificial intelligence can also streamline order replenishment processes, removing any room for human error, and providing a reduction in labour costs for business owners. Order replenishment can be optimised through the power of AI in predicting the shopping behaviours and habits of consumers and automatically sending orders for replenishment,

Smart devices such as Amazon Echo and their well-known Dash Buttons are examples of automatic replenishment. They are are changing the way their customers’ shop, streamlining the purchasing and checking out process, while also informing Amazon of the shopping trends and preferences of their millions of customers.

An increasing number of retailers and other types of businesses are following suit and implementing technology to automatically place orders based on customer habits and behaviour, thus enabling retailers to optimally predict demand for products and make a move to improving efficacy in the supply chain.

Truly a domino effect, the increased ease of placing replenishment orders which results in accurate predictions by retailers which then improves supply chain efficiency, then finally results in yet another benefit of lower storage costs for business owners and faster shipping for customers at reduced costs.

Online Shopping and Delivery

Highlighting the ultimate importance of AI. Kevin Hogan, an engagement management director at Deloitte Digital, has stated that many retailers can’t afford to have a 30-person marketing team or 30-person merchandising team or 300-person call center,” to compete with the bigger or more successful businesses, and that these companies are going “to have to get smarter to compete” with the many businesses investing in artificial intelligence. .

Today’s modern retailers are seeking out every avenue possible to distinguish themselves from the competition.

From increased customer service practices to predicting customer behaviour and tailoring experiences for them, businesses all over the world are beginning to realise that becoming a formidable presence in the business world requires incorporating evolving technology such as artificial intelligence.

AI drives the kind of personalised engagement with customers that all businesses covet and is now proclaimed as the “new battlefront in the retail industry”. Whether you have been in the industry game for decades, or are just starting out, prepare to go to war with legions of competitors and slay them all with a well-stocked arsenal of artificial intelligence weaponry,

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