"The distinctions that we talk about today between stores, apps, pick-up, delivery and sites are continuing to blur into the background for customers. As proof of its thesis, the retail behemoth founded by Sam Walton recently achieved success in halting nine quarters of slumping online growth and registered robust growth in its online sales. Meanwhile, Amazon, the very model of online retailing seems to have big ambitions to launch physical stores. It will be interesting to see how the e-commerce giant's strategy to delve into the physical space, with its own omni-channel approach to the market, unfolds in the long run. The world of retail is clearly going through a profound transformation.
This post is the latest in our "Holiday Blitz" series. See the rest of the series here. Seventy-seven percent of millennials say they plan to shop at brick-and-mortar stores this holiday season. One of the primary reasons why is the experience of in-person shopping. The role that sales associates play in motivating in-store purchases can't be understated, as consumers regularly cite personal attention as a reason why they prefer to shop offline versus online.
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.
AI enables computers to make autonomous decisions. It is a step forward in automation that is changing the retail industry. In retail, AI is used to analyze customer data, adapt how companies interact with shoppers and predict consumer demand in order to better manage inventory. For example, AI can decide for the retailer what items to show to shoppers and how to display and present them, and it can recreate the interaction that the shopper experiences with store associates at brick-and-mortar stores by guiding and advising the customer. AI enables retailers to drive sales and anticipate demand, gain a better understanding of consumer behavior and offer highly accurate, individualized promotions.
Digitally connected brick-and-mortar retailers have gathered an enormous amount of data regarding their consumers' preferences via Internet of Things (IoT) hardware such as mobile devices, cameras, smart lightbulbs and beacons, but this data often remains underutilized without driving questions. The key to achieving a truly connected overall marketing strategy lies in integrating the information acquired by a retailer's omnichannel strategy with their mobile strategy, as well as their retail supply chain (i.e., inventory, in-store customer engagement strategies, and real-time mall activity). But how can these multiple layers of complex data be properly integrated, and how are retailers currently faring at this task? Many retailers are overwhelmed by the amount of data they have collected regarding their consumers. To better engage potential customers, machine learning is being used on large amounts of data to identify patterns in shopper behavior.