The initial association of AI with the retail industry began with e-commerce and a few disruptive stores like Amazon Go. In the pre-pandemic years, the online shopping experience had already been transformed by chatbots, personalised suggestions, and digital payments. Post-pandemic, the massive losses suffered by most retail businesses have accelerated the need for digitisation. Today, the retail sector has embraced AI and big data unanimously, with even small/mid-sized stores investing in suitable tech solutions.
Benefits of AI-driven Retail Solutions
The losses can be colossal for retailers hesitant to switch from traditional operating systems to AI-led retail solutions. Across every segment/department of the retail business, AI solutions have significantly improved speed, operational efficiency, and precision. The widespread benefits of AI-driven retail solutions are listed below.
1. Enhancing Business Opportunities– Cutting-edge data, predictive algorithms, and sales intelligence enable businesses to expand and diversify. It bolsters their business opportunities in the existing markets and targets new market segments.
2. Boosting Consumer Experience– The more customised and immersive the shopping experience, the greater the ability of brands to attract new customers.
3. Fuelling Retail Innovation– Accurate business insights from data retail analytics allow businesses to plan and implement unconventional marketing strategies. Having concrete data as a backing provides much-needed confidence to embark on uncharted paths.
4. Highly Effective Merchandising and In-Store Promotions– The ROI of in-store promotions and merchandising can be exceptionally high when automated planograms and AI-driven merchandising are carried out.
5. Reinvigorating Operational Capabilities– Streamlining retail store operations for a seamless workflow, higher speed, and efficiency is the need of the day. Automated retail solutions enable this requirement, thus allowing retail brands to focus on the customer and cut unnecessary expenses.
Major Applications of AI in the Retail Industry
1. AI Solutions for Supply Chain and Logistics– Supply Chain Management is an immensely challenging and crucial zone for retail businesses. Multiple stakeholders are involved, and the coordination required is immense. AI-driven solutions are helping businesses create a seamless, transparent, and sustainable supply chain.
2. Retail Solutions to Capture Consumer Preferences for Demand Forecasting– Legacy systems in earlier use would only provide a superficial overview of consumer preferences. State-of-the-art retail solutions yield razor-sharp insights into the customer psyche, enabling retailers to cater to them impressively.
3. AI-driven Database Insights– Merely acquiring data and compiling databases does not solve any purpose for a retail business. The data is converted using AI technology and advanced algorithms into meaningful insights that can be practically implemented. These insights are immensely useful for retail sales, marketing, operations, and other backend functions at the organisational level.
4. Tailoring the In-Store Experience– Across every retail segment (FMCG, Apparel, Lifestyle, Home The average consumer today has ample choices for both online and offline shopping. The only way to entice them and ensure repeat visits is by meticulously crafting the in-store experience. AI-powered mood sensors, virtual shopping assistants, smart mirrors, and intelligent scanners render an exceptional shopping experience.
5. AI-led Inventory Management– For store managers, keeping track of the in-store inventory and ensuring timely replenishment is a major responsibility. AI-driven systems for inventory management eliminate the need for manual counting and unnecessary paperwork. Real-time figures are accessible at all times, thus saving the time and money spent on periodic audits.
6. Optimal Pricing Management– Tracking and monitoring the product pricing in real-time for large retail chains helps in adherence to the Minimum Advertised Price. It also allows businesses to plan festive and dynamic pricing to outdo competitors.
7. Smart Sensors for Error Detection– AI-driven sensors can help detect non-scanned or untagged products, thus nipping pilferage issues in the bud. Sensors are also helpful in tracking employee activity, thus ensuring accountability.
It wouldn’t be far-fetched to say that big data, AI, and machine learning solutions have revolutionised the retail industry. The application range is constantly expanding from virtual trial rooms and VR shopping to interactive visual search and helping robots. Initially, the baton was passed around by retail giants like Amazon, Sephora, Walmart, Dominos, etc. Today, over 60% of retail businesses actively use AI for supply chain management, customer intelligence, and CRM. The pandemic-hit sector has greatly benefitted from automation and data-driven intelligence, with remarkably higher sales and consumer loyalty. Experts suggest that this trend will gain further pace in the foreseeable future.
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