How Can Artificial Intelligence Boost Retail?

Artificial Intelligence

How Can Artificial Intelligence Boost Retail?

In recent years, technological developments have played an essential role in the transformation brought about by retail trade. From chatbots deployed to assist customer service to automatically filled shopping carts, AI is paving the way for new practices. How does the use of artificial intelligence in retail present an opportunity? In the coming years, artificial intelligence, or AI, is expected to play a critical role in driving various aspects of the retail industry (full article available in English for Gartner clients). 

Improving its efficiency, speed and accuracy with advanced and predictive analytics technologies, AI can help retail businesses make strategic decisions based on data. Through AI, merchants can gain a significant competitive advantage.  Businesses with AI-enabled technologies can explore other possibilities to acquire new customers, centralize processes and improve the personalization of the customer experience.

In addition, artificial intelligence helps to streamline inventory management and can help boost business efficiency. Please find out how industry professionals can use AI to communicate with customers and optimize their operations.

Main Challenges For Traditional Retail Businesses

The context of the pandemic has represented a significant challenge for the retail sector, particularly for traditional physical stores. In total, nearly 299,000 jobs were lost in this area in 2020, not considering the case of permanent closures or that of traders who could not hire again when purchasing resumed at the store. Here are some critical challenges for these stakeholders that are important to consider.

The Progression Of Online Shopping Habits

E-commerce is and will remain one of the biggest challenges for traditional stores. With consumers having more options and flexibility to purchase goods and services online, traditional brick-and-mortar retail stores must also consider the growing importance of specialized e-commerce retail players.

Issues Related To The Quality Of The Customer Service Offered

Regarding customer service, companies in the industry rely entirely on their employees. The customer experience is essential to their loyalty. According to Gartner (full article available in English for Gartner customers), 87% of companies declare that part of their competitiveness is based on the customer experience offered. Yet nearly 6 in 10 (57%) of customer-facing employees say they don’t feel “well prepared to succeed” in their interactions. 

The Challenge Of Finding And Coordinating Staff 

At the end of the confinement, traders had to face the difficulties linked to job losses in the sector, as mentioned previously. When stores reopened, employers had to make significant efforts to rehire qualified staff, facing a booming job market.

Maintaining Brand Loyalty And Reputation

At a time when consumers have a wide variety of offers as well as purchasing channels, customer loyalty and market implementation can prove more difficult than before. Although the digital transformation of processes and purchasing habits is changing the retail sector, this does not mean that its traditional players must immediately turn to online sales. On the other hand, they can consider leveraging AI to support their business.

3 Practical Applications Of Artificial Intelligence In Retail

Turning to innovations is one way to grow and sustain a retail business in today’s economy. But what are the practical applications of AI for this type of activity?

Automation Of Operations

Automation facilitates a retail business that can free staff from repetitive tasks to focus on value-added assignments. Cashier-free supermarkets are one of the examples to illustrate this. This concept allows the customer to register via an app while facilitating the automation of the entire purchasing process. Artificial intelligence here can manage all aspects of the retail supply chain in real-time, including inventory, distribution, staffing and delivery.

Reduced Energy Consumption

Artificial intelligence can ally companies in their sustainability and energy sobriety objectives in the face of environmental challenges. This technology can more accurately forecast sales and determine the number of items to order, which is especially important for perishables and other products with a short shelf life. 

Carrying out more precise inventories, therefore, has the advantage of less waste.  AI is also presented as a tool to consider for reducing energy consumption, with specific software making it possible to monitor, for example, energy consumption for lighting, ventilation or even air conditioning in offices.

Inventory Tracking

“Out of stock”: A phrase few customers like to hear. Using artificial intelligence, it is possible for a merchant to more easily identify which product is likely to be sold out and quickly replenish it. Some large stores even use robots to restock their shelves when a customer has picked up an item.

AI At The Service Of The Customer Experience

If AI is used to streamline retail operations, it is also a way to understand the customer experience better. We will now examine some of these advantages in this area.

Easy Customization

Regardless of a company’s industry, customer experience is a crucial concern. This is why significant efforts are often made to enable customers to get the best possible experience from interacting with a brand. Paying particular attention to personalizing their journey is one way to improve customer satisfaction. With AI, this can range from using voice-activated navigation systems to directing customers as they enter a physical store. Another option is to create virtual spaces for consumers to try products.

Strengthening Staff Skills 

AI technologies can be complementary tools to support your teams’ work without replacing their skills. Thanks to artificial intelligence, employees no longer need to memorize the tedious details of each product in the store while being able to analyze customer data and spot any possible problems more efficiently. Not only does this aspect allow employees to devote more time to solving these problems, but also to deploy new professional skills to achieve this.

Improved Customer Experience

To help improve the customer experience, various CRM  ( Customer Relationship Management), GRP (Customer Relationship Management), and CDP (Customer Data Platform) platforms have integrated AI. AI-driven interactive robots (bots) can also help service personnel optimize the customer experience. In addition, sentiment analysis and predictive analytics enable retailers to gain actionable insights. They help guide subsequent interactions between a brand and a customer.

In addition to its value as a business analytics tool, AI can improve the consumer journey in multiple ways. This includes real-time conversation tracking, feedback to staff, intelligent language tracking features, and voice patterns and psychographic profiles to anticipate customer needs. Some CRM platforms have integrated AI into software for real-time tracking of decisions, predictive analytics, and conversational assistants. These features help brands fully understand and engage their customers.

Improve The Overall Quality Of Your Business Using AI

We’ve seen how AI can streamline operations and improve the customer experience. We’ll look at how it can help you improve your bottom line with optimized sales and marketing strategies.

Improve Upsell And Cross-Sell Processes 

Consider a reputable e-commerce business model: How do these businesses offer their customers the most appropriate offers? It all starts from the first use. Once an account is opened with one of its companies, the consumer’s activities are monitored to offer them the best offer, thereby promoting personalized service.

Once an account is opened, AI can allow retailers to track their customers’ shopping journey. The AI ​​creates promotional offers, bundles, and other discounts from this data to build loyalty. It can also anticipate what the customer will need on his next visit so the merchant can stock up in advance.

Target The Right Customers

In retail, AI is an exciting tool for identifying and targeting the right customers. A large amount of data must be considered to profile customers and their purchasing habits. Due to the many variables, processing data can be daunting for a single person or even a group. Using machine learning, the AI ​​can reliably identify customers with comparable demographics to previously identified customers. With this automated identification process, the store employee only has to find a way to engage and convince these customers.

Measure Results Using Split Testing

Split testing is an example of how companies use AI to get to know their customers better and provide better services. In a split test, the entrepreneur tries two versions to see which performs better. This method is used mainly for websites, but nothing prevents retail businesses from using it. Store managers can regularly change their layout to determine which favors sales metrics the most. 

AI helps determine which configuration performs best. Split testing makes it easy to gather insights and data for better tracking and improving performance. This technology allows consumers to follow the trade path and identify the categories of products most in demand or the locations requiring more attention. With this information, businesses can improve store layouts and product placement to help drive sales growth.

Should AI Be Used For My Business?

AI presents a new opportunity for retail businesses to strengthen their attractiveness to customers, promote consumer loyalty and positively impact their turnover. However, the cost of implementing AI technologies and the difficulty of finding competent collaborators can discourage specific structures, in particular, the managers of small companies. 

Due to data breaches and ethical concerns, leaders struggle to adopt and implement AI. The solution? Start small. Define your business needs, select a priority, and experiment with different AI approaches to meet the challenge. You can also reduce costs and time associated with AI implementation by outsourcing these services to a reliable and reputable company.

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