AI can affect almost every aspect of retail, including customer service, inventory management, and even real estate operations.
1. Personalized Customer Experience
Online and physical locations department stores use AI to analyze data from a variety of composite data repositories, including order history, browsing history, and their loyalty programs, to personalize and improve the relevance of marketing messages. Clothing retailers use AI-powered chatbots to provide more relevant recommendations online or over the phone, providing conversations about where and how to wear a new coat.
2. Improving cross-seller opportunities
The ongoing supply chain disruption caused by many factors (including crop failures, truck driver strikes, and geopolitical upheavals) has forced grocery retailers to rethink their satisfying models and product assortment to meet consumer demand. Grocers are increasingly adjusting their planning decisions to forecast demand, inventory management, and product receipts (checking items received against purchase orders).
3. Automatic inventory management
Small grocery chains use AI to determine the right time to shuffle dairy and other rotten items onto store shelves, minimizing waste. Large European supermarkets, where people tend to shop during their lunch breaks, use AI to help with multiple restockings throughout the day.
4. Demand forecast
Retailers can use AI to better predict the demand for specific items across the region by drawing in and analyzing data on other items, data from stores with similar demographics, and third-party data such as weather and income levels. The National Pharmacy recently used AI to track and predict demand for specific vaccines based on national trends reported to the federal government.
5. Friction-free shopping
Retailers combine AI with video and sensor data to eliminate the area for sale, pulling items from store shelves, putting them in shopping baskets, and going out without waiting for them to check out. By removing equipment at cashier lanes and sales locations, you can use floor space to view more items for sale. Supermarket chains across the country use AI to visually scan and charge products with unreadable barcodes.
6. Optimized Price
Retailers use AI to analyze data on the same or equivalent products, local demographics, and competitor prices for advertising and other promotional impacts to help them determine the highest price they can charge an item without turning off shoppers. Considering that most customers prefer to shop in only one location, there is more than one purchase. If you set the price too high, certain customers will abandon their entire shopping cart and go to competitors' stores and websites. If the priced item is too low, it cuts to the margin and sometimes lowers the product.
7. Dynamic Merchandising
Retailers use AI to recommend products that come with items online that customers have searched for purchase history or already put in their shopping carts. One cosmetics retail chain uses AI to allow customers to choose the makeup colour and shade that suits their complexion. Physical stores can use AI to make sure they are offering promotions for slow moving items, even on the day alone, but they are courses that pull back promotions for items you often sell yourself and change rapidly as needed. Retailers can also use AI to compare the results of these choices from one store location to another (A/B test) and adjust accordingly.
8. In-store robot
AI, combined with video cameras and sensors on the shelf, allows retailers to better understand pedestrians in stores and improve sales per square foot. The technology does so by identifying products that customers don't leave nearby and identifying products that retailers recommend replacing them with more attractive products. AI can also generate targeted promotions for specific items on shoppers' mobile devices while they are in the right store location. This technology also helps retailers improve how they cluster their products.
9. Smart Store
AI, combined with video cameras and sensors on the shelf, allows retailers to better understand pedestrians in stores and improve sales per square foot. The technology does so by identifying products that customers don't leave nearby and identifying products that retailers recommend replacing them with more attractive products. AI can also generate targeted promotions for specific items on shoppers' mobile devices while they are in the right store location. This technology also helps retailers improve how they cluster their products.
10. Supply Chain Optimization
As supply chains are destroyed for a variety of weather, geopolitics, labor, health and other reasons, retailers face even more challenges and ensure that popular items are affordable and stocked. One convenience store chain used machine learning, a form of AI, to understand hundreds of factors affecting the supply chain, and therefore the availability of products including weather, current events and influencer posts.
