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.
Artificial Intelligence (AI) is noticeably making a difference in how we live and work. Search engines predict words and translate text, social media connects people, smart appliances respond to ambient conditions, and public transportation is becoming autonomous. Similarly, the retail industry is set to unleash fascinating possibilities by embracing AI.
With a record 7,000 store closings and 662 bankruptcy filings last year, and 3,800 closings (and counting) so far in 2018, the fate of retail continues to look uncertain. Take a look at Amazon to see how ecommerce has changed the retail landscape as we know it, leaving no industry undisrupted. With just a click of a mouse, customers can purchase whatever they want, whenever they want it -- and have it shipped directly to their door. Related: Here Are 6 Weird Ways You're Being Tracked in the Real World While ecommerce offers unprecedented convenience, this is not the end of the road for brick-and-mortar. Customers still value in-store experiences.
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.
Augmented/Virtual Reality Tools – Startups that leverage augmented or virtual reality to aid retailers in layout of stores and the design of promotional displays. InContext Solutions, which has worked with clients like Walmart, Nestle, and Kellogg's, lets brands visualize marketing concepts and test new designs on shoppers in virtual reality to gauge their efficacy before launch. Augment aims to help brands, such as General Mills, L'Oreal, and Coca-Cola, pitch their vending machines, kiosks, or merchandise displays to retailers by showing how they would look in augmented/virtual reality. Beacon-Based Analytics and Marketing – Companies that provide hardware and software to help stores track visitors. Many focus on data collection for internal analytics, such as merchandise tracking, adjusting staffing levels, monitoring promotions, etc. Euclid Analytics, for example, tracks visitors to monitor the impact of promotions on driving store visits and to better understand when people visit stores and specific aisles.