The launch of online shopping sites like Amazon and Walmart has forced traditional retailers to look for new methods to keep up with the market. They turned to one of the most advanced technologies – artificial intelligence solution to increase revenue and profit. Artificial intelligence is improving the overall customer experience in retail. From helping customers find products according to their choice to interacting with them and keeping them engaged with chatbots, AI has revolutionized retail!
Some of the applications of this incredible technology in retail stores are:
1. Product Recommendations
AI-powered machine learning recommendation engines help retailers analyze the types of products customers prefer using their previously purchased history and demographic information. Another benefit of AI is robots that improve the customer experience. Customers prefer friendly robots to salespeople. They can freely ask the robot about various products without thinking and get the best recommendations. Let’s say you’re looking for an air conditioner. You can ask questions about your hair type and the best conditioner brand for you. The robot will recommend you the best products. Thus, robots not only save time and effort, but also make the shopping experience more personalized. The Japanese Pepper Robot is a humanoid robot
2. Personalized messaging and email campaigns on the website.
When it comes to online shopping, the buying model of customers is taken into account. This data is then used to create a user-friendly version of the website, which will increase the likelihood of a purchase. AI uses ML to monitor demographics, past user clicks, and user activity on the website to create personalized email templates for subscribers. Users are classified according to certain criteria and an AI application is used to send certain email templates to them. Customer loyalty and retention can be greatly improved through targeted marketing.
3. Fraud detection
Leading retailers such as Walmart, Amazon and Stop & Shop are working to improve their AI fraud detection systems. Artificial intelligence monitors each transaction and determines the risks associated with it in accordance with known transaction norms. AI can be used in the following retail fraud detection use cases:
- Predictive Analytics – AI provides platforms for analytics on large-scale transactions and suspicious customer behavior that may be related to past fraud. The AI also helps keep track of employees as it can detect irregular patterns of transactions that could indicate if a cashier is giving additional discounts. It can also recognize transactions made outside of normal trading areas. AI algorithms can also catch irregular refund requests. They are widely used by retailers during the holiday season when these requests automatically increase.
- Anomaly detection. AI can detect payment activity over a period of time and identify deviations. They can be further investigated if some violations are found. Based on this data, the retailer can strengthen the security of transactions.
4. Customer service
If you open the websites of large retailers, you can find a floating browse button with a popup option as soon as you get to the homepage. These are the chatbots that these retailers use for customer service. AI-powered chatbots respond to customer inquiries about products, services, returns, tracking, refunds, and more. Customers are welcomed and asked to ask their questions. This makes the overall customer experience more personalized and interactive, resulting in more sales. Customers enter their questions into the chat window, and chatbots answer them using pre-written templates. They can also listen to customer voice commands, make suggestions, and assist customers in every possible way.
5. Inventory management
Retailers can use a powerful inventory management system application built using machine learning to properly manage their inventory, prices, and customers. It keeps track of stock available in stores and also helps to automate warehouse operations. These apps can detect and alert relatives if they run out of any item in the next few days. They can also predict whether demand for a particular product will increase using past records for that time of year, customer needs recently, and so on.
Every retailer has a fear of theft or loss in retail, which leads to a damaged reputation and affects customer loyalty. Thus, retailers are implementing effective software and hardware security systems that use advanced technologies such as IoT, AI and ML to prevent security breaches. Security management systems combine with biometric surveillance technology to combat retail theft. Security cameras are linked to analytics tools that use artificial intelligence algorithms to detect footage that can detect suspicious body language, fidgeting and restlessness, immediately alerting staff to potential thieves. This setup is the benchmark for retail security!
7. Merchandise and store management
AI in retail is also being used to properly manage stores. If cameras inside the store detect empty shelves, they alert employees to refill them, resulting in more sales. The AI tools also help the robots reach objects quickly and warn them of any dropped objects that might obstruct the path. Vision-based applications can also provide information on how the store should arrange its tables and shelves to manage more space for new products and shoppers by analyzing foot traffic in different areas of the store.
AI is changing the face of retail. Retailers learn important information about their business that they would not be able to analyze manually. AI has been one of the main drivers behind the growth in store sales. It is important to have proper knowledge about artificial intelligence technology in order to use it effectively and enjoy all the benefits that it brings. From identifying trends with machine learning to interacting with customers with chatbots, AI does it all. Automation is the future of all industries. Sentiligent Academy offers a great platform to learn more about the same.