According to recent data, the majority of retailers think artificial intelligence (AI) will be a competitive necessity in the next few years. This comes as no surprise, with the expansive list of benefits that AI brings to the retail industry, including improved customer experience, reduced operational costs and increased efficiency. As retailers are rushing to realize the benefits of AI and machine learning technologies in tandem with customers expecting a top-notch in-store experience across all touchpoints, the challenges with adoption are becoming apparent. At some point, whether online or in-store, consumers will want to speak with a live person. When it comes to integrating technology into the retail experience, there will inevitably be a time when it makes more sense for a customer to speak with someone face-to-face or on the phone.
Artificial intelligence and automation has everyone scared for their jobs these days -- especially in retail. It's being used to predict demand, reduce inventory and automate decision making. Walmart is deploying robots to analyze shelving inventory and look for missing labels or prices. Kroger is implementing smart shelves that automatically update pricing. Amazon recently launched cashierless checkout with Amazon Go and is planning on opening more stores this year.
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.
The retail industry is in a constant state of transformation. The retailers are attempting to survive the fierce competition in the market and fast-changing customer shopping habits. Retail business owners are investing in cutting-edge technologies, including Artificial Intelligence (AI), robotics, data analytics, and logistics automation, becoming more customer-centric and responsive to demands in the industry. Among these advanced technologies, AI has a significant impact on almost every operation within a retail business. By 2020, retailers are expected to spend $7.3 billion annually on Artificial Intelligence technology.
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.