There are a lot of ways AI benefits retailers—from making better pricing and stocking decisions to improving overall operational efficiency, but there are a few bigger benefits to dig deeper into, including the following five.
1. Understanding your operations and your customers. Predictive analytics can help you keep track of how your customers are interacting with your brand in all the various channels and then plan and make adjustments accordingly. For example, if you want to know where your customers spend the most time in your stores there are AI machines that can capture that information and you can change your floor plans to boost sales. And machine learning can capture historical data that can help drive purchasing decisions and predict product demands.
2. Better customer experience through personalization. According to an article by McKinsey & Company “a survey of 1,000 US adults by Epsilon and GBH Insights found that the vast majority of respondents (80 percent) want personalization from retailers.” And AI and machine learning can give you a big boost in personalization. When you understand your customers’ preferences—whether it’s what they buy from you or what they enjoy doing in their free time—you can easily gain that information and use it to improve your online and in-store experience, upsell more products, increase conversion rates and most importantly deliver better personalized customer service that builds loyalty.
Here’s a fascinating example as reported by Supply & Demand Chain Executive: “[AI] is helping the world of beauty by being able to personalize ingredients based on individual genetics and using real-time readback with a questionnaire to determine fit and accessing database of collected data to fine-tune results.”
3. Reduce costs and improve labor with automation. Thin margins have made automation in the retail industry a priority for years—when you can improve your margins by automating routine tasks it’s easy to see why. You can improve accuracy with automation and save labor costs while utilizing your staff to perform higher-value tasks like increasing customer conversions. Whether it’s sophisticated chatbots on your website interacting and helping customers or in-store robots stocking shelves, automation powered by AI and machine learning can be a significant way to improve operations and save costs.
4. Improve your ecommerce experience. If your online shopping experience had a mind and that mind was like a human’s, how much more intuitive would it be for your customers? Their need to make time-consuming searches for what they want would be greatly reduced and they could easily see more things to buy that they didn’t even intend on purchasing all while getting a personalized shopping experience. And when they can quickly find what they want to buy and check out quickly they will keep coming back to your website (hello, Amazon).
5. Gain more effective marketing. According to a recent Forbes article, “AI and machine learning are on track to generate between $1.4 Trillion to $2.6 Trillion in value by solving marketing and sales problems over the next three years.” Thanks to machine learning you can gain a wealth of information about your customers and use it to personalize marketing campaigns that offer customers what they want and value—so you’re reaching the right audience which is much more likely to lead to conversions.
Related: Future, interrupted: The new store of tomorrow and how retailers can adapt