March 15, 2018
Dan Peacock | Vice President of Product Strategy
The rapid evolution of artificial intelligence (AI) and robotics have now become a part of everyday life and as they become increasingly more affordable, more industry sectors are getting onboard. Retailers have begun to realize the benefits of AI and robotics – helping drive sales while streamlining and adding value to the customer’s experience across physical and virtual channels.
We live in an increasingly interconnected world. The mobile devices in our pockets have unprecedented processing power and storage capabilities. More striking, though, is the seemingly limitless access to information and knowledge this technology provides. All that data – from AI and robotics to 3D printing, nanotechnology, and biotechnology to the Internet of Things (IoT) – has radically changed the retailing paradigm and that change shows no signs of stopping.
As computing power increases, the technology that was once considered space-age becomes affordable and usable across all domains. That’s why robots are now common in manufacturing and in retail warehouses, but it won’t stop there. Machines are also taking on human touchpoints, such as chatbots in call centers already providing support and advice to consumers.
You should expect to see more of this, as well. AI-inspired venture capital investment doubled last year to over half a billion dollars, according to CB Insights.This investment can be attributed to the robotics market growing at over 17 percent, with an estimated value of $135 billion by 2019. In fact, while it’s unlikely that robots will replace all human interaction anytime soon, robot-services can automate most of the high-volume, low-value, repetitive customer communications.
AI is essentially a collection of technology and mathematical techniques that let us take a big chunk of data, classify it, make predictions from it and cluster it to find patterns. That’s why AI developments must be about more than just speed, response time and storage capabilities. The value of the data also must be considered. Only together can all those attributes make a difference.
With AI support, the retail experience can be revolutionized. Websites evolve with a consumer, triggered by the data trail left on the site. Based on previous purchases, searches, navigation habits, age, gender, time of the year, etc., self-learning algorithms can offer targeted personal suggestions for products; suggestions only get better as AI technology learns patterns and improves upon itself.
Communicating with a human when making inquiries or getting support is becoming a rare experience as more retailers use chatbots on websites, social media, and other such applications. Now, customers can make inquiries through speech or text, leaving bots to assess, respond and execute simple tasks. Applying machine learning to these services means the bots can learn from the data and handle more complex tasks – becoming digital assistants and further resembling human interaction.
We have all become accustomed to the instant gratification promised by digital shopping, but applying AI to the entire shopping experience is a game changer. At the marketing phase, AI enables retailers to tailor advertisements and promotions for each specific customer – saving on expensive and inefficient large-scale marketing campaigns such as TV, radio and social media that spread one message in hope of reaching a small percentage who are interested in the product/service. With AI, the more familiar a retailer is with a customer, the more effective the promotion will be and the more likely that customer will make a purchase.
Retail loyalty programs will also become more personalized with AI. As a result, each customer can earn loyalty points in their own way, as well as automatically gather more points when they visit a brick-and-mortar store – rewards can be tailored to customer-specific hobbies and interests.
AI is no longer restricted to cyberspace. A visit to the brick-and-mortar location of your favorite online store results in the same recognition and personalized promotions that you would see online. AI also can augment the store experience, directing consumers to styles, colors or other products that may suit them better. Also, virtual mirrors can project clothing and accessories onto customers’ bodies, eliminating the need to regularly try the clothes on before buying them.
AI offers the ability to gain valuable insights from large volumes of data, thus allowing for more accurate predictions that incorporate a variety of factors. With AI, a retailer can automatically link predictions to promotional deals and drastically reduce the cost of customer interactions. AI is developing fast and as technology marches on, it will have an increasingly ubiquitous place in our everyday lives.
The AI era has officially arrived for retailers.