New Delhi: Successful retail businesses have replicated their profitable models across geographies and have scaled-up fast to grab a sizeable global market share. These mega-players, however, are on the constant lookout for risks posed by disruptions and smaller innovative competitors that can seize a significant portion of their existing customer base. Irrespective of size, enterprises that leverage automation and artificial intelligence (AI) to simplify decision making are better positioned to achieve profitability through a consistent customer experience, a rationalized and efficient IT application landscape, a strong talent pool and meaningful relationships with their partners. Business stakeholders must take the lead in AI adoption. IT teams must be welcomed to give their inputs but the overarching direction of an enterprise-wide retail AI must come from the business leaders.

According to a recent study from market research firm Graphical Research, the global artificial intelligence in retail market size is set to register a significant growth during the forecast time frame. The public and private sector investments in advanced technologies like AI are rising at a robust rate. Investors have realized the power of AI and its anticipated deployment in myriad use-cases, thereby boosting the adoption of AI in retail stores. Recommendation engine solutions held more than 25% share of the North America artificial intelligence (AI) in retail market in 2020. High-end technologies, such as AI, machine learning, and data analytics are being heavily implemented across the retail sector.

Over the last few years, artificial intelligence technology has made some interesting advancements across multiple industries. While it may not be so obvious to the end consumers, artificial intelligence has been applied in the retail sector as well. Even though not every retailer has been using it due to high costs, inaccessibility, and proprietary systems, the largest players in the retailing have been pretty active about it. It's no wonder given the benefits AI can bring to the actual businesses. So how exactly can artificial intelligence help retail store owners?

This year's sold out #shoptalk2019 conference was both engaging and enlightening. The event brought together 8,500 participants from the retail ecosystem to share trends, technologies, and innovations on how to be a better retailer – particularly in the age of digital. Anil Aggarwal, CEO of Shoptalk, introduced himself to the crowd with the comment, "[Retail] needs to transform for a modern digital age." For Anil, this was an imperative, not just a nice to have. For me, however, the experience was even more lucid than Anil's interpretation – especially around AI technology.

When people say "AI software", what do they really mean? This is a critically important question to understanding the impact that AI can have on the retail industry (on any industry, really), and a significant source of the gap that exists between AI hype and reality. While McKinsey focuses on AI types of classification, prediction, and generation, I've found it more useful to look at natural language processing, computer vision, and prediction. But each of these are umbrella terms for lots of what amount to "micro-capabilities", which is an important limitation when thinking about AI. Artificial General Intelligence (AGI, but sometimes referred to as Human-Level Artificial Intelligence) is at least 20 years off, according to experts in the field, and possibly 50 years.

Chances are, if you have 10 million travel club members scattered across 12 countries -- making you a top-10 volume travel retailer in Europe -- someone's going to be interested in the latest limited-availability, four-star hotel flash sale you're about to post on your site. The problem is, with 250 deals running at any given time and roughly 140 deals opening and closing weekly, finding that someone without blanketing too many members with too much email -- to the point where they ignore them -- becomes a difficult task. That was travel vendor Secret Escapes Ltd.'s technology issue: Controlling overall email noise while still growing sales via email marketing automation. Enter retail AI, which examines data points of consumer behavior and, combined with rules-based marketing automation, cashes in on sales by predicting consumer behavior in future transactions. This means companies can create targeted promotions instead of bulk mailing everyone all the time.

Over the last few years, artificial intelligence technology has made some interesting advancements across multiple industries. While it may not be so obvious to the end consumers, artificial intelligence has been applied in the retail sector as well. Even though not every retailer has been using it due to high costs, inaccessibility and proprietary systems, the largest players in the retailing have been pretty active about it. It's no wonder given the benefits AI can bring to the actual businesses. So how exactly can artificial intelligence help retail store owners?