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.
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.
The rapid pace of innovation in the e-commerce sector propelled by the trend'bricks to clicks' is increasingly shifting consumers to online shopping. A major disadvantage for offline retail stores is their lack of knowledge on customers entering their premises. Here, artificial intelligence (AI) opens up a big opportunity to predict the purchasing behaviour of in-store customers. AI through its sub-technologies such as machine learning and deep learning can enable offline retailers to derive actionable insights from consumer data (structured and unstructured) to offer predictive and precise decisions for better customer experience. AI practices incorporated by global offline retailers The global offline retail industry has been moving toward increased automation, cashless transactions and self-checkout stores based on consumer behaviour patterns, and demand for increased convenience.