The release of online shopping sites such as Amazon and Walmart have made the traditional retail shops search for new methods to keep up in the market. They have turned to one of the most advancing technologies – Artificial Intelligence to increase revenue and profits. Artificial Intelligence improves the overall experience of the customers in the retail domain. From helping customers find products according to their choices for interacting with them and keeping them engaged through chatbots, AI has brought a revolution in the retail industry! Some of the uses of using this incredible technology in the retail shops are-
7 Applications of AI in Retail Industry
1. Product Recommendations-
The ML recommendation engines powered by AI help the retailers by analyzing the type of products customers would prefer by using their previously purchased history and demographic information. Another boon given by AI is the robots that add to the customer experience. Customers prefer friendly robots over salesmen. They are able to freely interrogate the robot about different products without any hesitation and get the best recommendations. Let us assume you’re looking for a conditioner. You can ask questions about your hair type and the best conditioner brand that would suit you. The robot will recommend the best products for you. Thus, the robots not only save time and effort but also make the customer shopping experience more personalized. Japan’s Pepper Robot is a humanoid robot available in 140 SoftBank mobile retail stores and is said to increase 70% footloose in the stores.
2. Personalized Website Messaging and Email Campaigns-
When it comes to buying online, the buying pattern of the customers is taken into account. This data is then used to make a user-friendly version of the website that will increase the purchase chances. AI uses ML to monitor the demographic data, the past clicks of the user and the website activity of the user to create personalized email templates for the subscribers. The users are categorized according to certain criteria and the AI application is used to send specific email templates to them. Customer loyalty and retention can be improved significantly using targeted marketing.
3. Fraud Detection-
Leading retailers such as Walmart, Amazon, and Stop & Shop are working on enhancing their fraud detection systems by using artificial intelligence. Artificial intelligence monitors each transaction and infers risk associated with it according to the known transaction norms. AI can be used in the following use cases for retail fraud detection-
- Predictive Analytics- AI provides platforms for analytics for large-scale transactions and customers with suspicious behaviour which might be correlated with past instances of fraud. AI also helps to keep eyes on employees as it may detect irregular transaction patterns which may indicate whether a cashier is giving additional discounts. It may also recognize transactions done away from normal shopping areas. AI algorithms can also catch irregular patterns of return requests. These are highly used by retailers in holiday season times when these requests increase automatically.
- Anomaly Detection- AI can detect payment activity over a time period and detect deviations. These can be further investigated if some irregularity is found. The retailer can increase the protection of the transactions on the basis of this data.
4. Customer Service-
If you open the websites of large retailers, you might find a floating view button with a pop-up option as soon as you reach the homepage. These are chatbots that are deployed by these retailers for customer service purposes. Chatbots powered by AI answers the customers’ inquiries regarding products, services, returns, tracking, refunds, and other topics. Customers are greeted and urged to ask their queries. This makes the overall customer experience more personalized and interactive which leads to increased sales. Customers type their questions in a chat window and the chatbots respond to these using pre-written templates. They may also listen to voice commands by the customers, provide suggestions and help out the customers in every way possible.
5. Inventory Management-
Retailers can use an efficient inventory management system application made using ML to properly manage its stocks, rates and customers. It keeps a record of stocks available in the stores as well as helps in automating warehouses’ operations. These applications can detect and warn the relatives if they will run out of any item in the next few days. They can also predict if the demand for a particular product will increase using the past records at that time of the year, customers’ needs in recent times, etc.
Every retailer goes through the fear of retail theft or retail shrinkage which leads to a scarred reputation and affects customer loyalty. Thus, retailers are implementing efficient software and hardware security systems that use advanced technologies like IoT, AI and ML to prevent a security breach. Security management systems are combined with biometric surveillance technology to combat retail thefts. Security cameras linked to analytics tools that use AI algorithms to detect footage in which suspicious body language, fidgeting and restlessness can be detected which immediately alerts staff about potential thieves. This setup is a benchmark in retail security!
7. Merchandise & Store Management-
AI in the retail industry is also used for managing stores properly. If the cameras inside the store detect empty shelves, they alert employees to restock them which leads to the generation of more sales. The AI tools also assist the robots in reaching the items quickly and provide alerts for any fallen items that might hinder the path. Vision-based applications can also provide insights on how the store should arrange its tables and shelves to manage more space for new items and customers by analyzing the foot traffic in different areas of the store.
AI is changing the face of the retail industry. Retailers get to know important information about their business which they would not be able to analyze manually. AI has been one of the main reasons responsible for the rise in the sales of the stores. It is important to have proper knowledge of the AI technology to use it efficiently and avail all the benefits it brings along. From recognizing trends using ML to interacting with customers using chatbots, AI does it all. Automation is the future of all industries. Sentiligent Academy offers a great platform to have more insights about the same. For more information, do check our website- www.sentiligentacademy.com