While online shopping has taken great strides in recent years, the brick-and-mortar retail hasn't managed to keep pace. Artificial intelligence now permeates every aspect of ecommerce platforms, especially where customer interactions are involved. Smart product suggestions, AI-powered search, cognitive customer service agents are just some of the innovations that have helped make online shopping more personalized and enjoyable for the customer--and more profitable for the retailer of course. Meanwhile, AI advances in brick-and-mortar retail have mostly remained in inventory management and back store operations. The few innovations that have happened in the customer-facing aspects of in-person retail have little or no AI involved, and have failed to make tangible positive impact in the shopping experience and gain wide adoption.
The key internal capabilities needed to ensure a successful digital shopping experience are personalization, automation and the unique identification of the customer across shopping channels. In this report, we discuss how AI and IoT are impacting the retail industry. Retailers that aim to remain competitive cannot afford to ignore the potential benefits of these technologies. AI, a technology that enables computers to make autonomous decisions, is a step forward in automation that is changing the retail industry. Retailers are using AI to analyze customer data, adapt how they interact with shoppers and predict demand in order to better manage inventory. Because consumers are bombarded with an unprecedented amount of information, being able to deliver highly personalized content for each individual customer is crucial to staying ahead of the competition. Meanwhile, the use of AI to anticipate demand and estimate when items will be returned should translate into more efficient business operations. Digitalization is the key that will unlock the future of brick-and-mortar retail, and the IoT is a crucial part of it.
One of the more interesting artificial intelligence (AI) technologies to gain popularity in retail is computer vision. Computer vision solutions automate the process of collecting digital images and analyzing them at an in-depth level to inform decision-making. Essentially, computer vision allows a machine to "see" things and events, make judgments and react accordingly in the same way a human does. Computer vision is having a profound effect on almost every major industry, with retail no exception. In particular, retailers are finding that computer vision solutions are crucial components of the seamlessly blended digital-physical store experience customers seek.
The sense of discovery and surprise at something that matches an unrecognized yearning can be exhilarating. But the sheer size of many stores is exhausting -- with some, I need a site map, flashlight, and overnight bag to take it all in. In others, the inventory is specialized and packed in so tightly that online seems a better way to find what I want. If you're primarily an online shopper, you may be asking how relevant brick-and-mortar stores are. The answer is: quite relevant.
Traditional and new-school retailers alike are using AI and robotics to automate various parts of the retail chain, from manufacturing to last-mile delivery. Retail is under pressure to crack the AI code. After all, corporations in every industry are scrambling to adapt and integrate artificial intelligence into their products -- and retail is no exception. Learn how Walmart, Amazon, Sephora, Zara, and other retailers are using AI to reinvent the brick-and-mortar store. For traditional retail giants, this means entering the playing field with the likes of e-commerce behemoths Amazon and Alibaba, both of which are leveraging big data and powerful AI algorithms to transform the retail space. In addition to fierce competition, the need for a change in strategy is being underscored by the record rates at which many US retailers are shutting down. In 2017 alone, 21 retail chains applied for bankruptcy, including high-profile names like RadioShack, Toys R' Us, and Aerosoles.