You Can’t Spell Retail Without AI: More Than a Dozen Ways the Industry has Been Impacted by Artificial Intelligence

Yes, it is literally AND figuratively true that you can’t spell retail without AI. And while AI has made inroads into most every major industry, its impact in retail — for both businesses and consumers alike — is simply beyond compare.

We’re going to detail how AI is changing retail for the better across specific aspects of the business: customer experience, operational efficiency, product development/innovation, and business intelligence and analytics. And we’re going to show you how you can get your retail business leading the charge in AI.

Customer experience

In what is easily the most “obvious” part of the business — the customer experience, both online and in-store — AI has optimized shopping and engagement to deliver massive wins for customer and retailer alike.

• Personalized marketing/recommendations: AI can create targeted marketing campaigns based on individual preferences and behaviors and analyze customer data to present highly tailored product suggestions.
• Enhanced customer service: AI-powered chatbots can provide 24/7 customer support, answering questions and resolving issues.
• Virtual try-ons: An ideal way to meld online and bricks-and-mortar, AI can enable virtual try-ons for clothing and accessories.
• Augmented reality shopping: Bring the store into a shopper’s home with AI-powered AR that allows customers to visualize products in their own environment.
• Social media engagement: Monitor and respond to social media interactions and build relationships with customers… without lifting a finger.

Operational efficiency

One of the easiest paths to cost savings in retail is by leveraging AI to drive operational efficiencies. Because while retailers can only do so much to influence consumers to drive demand or diversify sourcing to reduce the costs of raw materials and products, operations — what happens within their “four walls” — is always 100% under a retailer’s control.

• Optimize inventory management: By identifying demand influencers such as trends and seasonality, AI can help retailers optimize inventory levels, reduce storage costs, and improve product availability.
• Fraud detection: Sadly, fraud runs rampant in retail, but AI can be used to detect activities such as credit card fraud and product theft and prevent it.
• Energy efficiency: Let AI “shut off the lights” as it can be used to optimize overall energy usage in stores, reducing costs and environmental impact.
• Process automation: Success in retail is often based on repeatable processes, and AI can automate many routine tasks, freeing up employees to focus on more strategic activities.

Product development/innovation

From helping retailers discover what’s new to finding new ways to reduce costs on existing best-sellers, retailers can lean on AI to further how (how quickly, how well, how cost-effectively) the products that fill their shelves are created.

• Product design: Right out of the gate, AI can assist in product design, in helping retailers identify new product opportunities, and in creating innovative, appealing products.
• Material selection: Once products are designed, AI can help retailers select the best materials for their products based on factors like cost, sustainability, and performance.
• Quality control: And once materials have been selected and sourced, AI can automate quality control processes, ensuring products meet internal standards and external regulations.
• Product personalization: Today’s customer wants unique treatment, and AI can enable retailers to offer personalized products, such as custom-made clothing or accessories.

BI & analytics

Throughout every step of every business process and workflow — in retail or ANY vertical market — data is being created. Sadly, throughout every step, it’s often not being collected or acted on. But with tools like Power BI, Azure Data Lake, and Fabric, Microsoft continues to provide retailers with tools to capture and act on all available data.

• Worker Empowerment: Fast, reliable and quick summarization of data at the finger tips of your workforce. From quick insights to a customer’s preferences to end of day store performance – leveraging AI to swiftly present and prompt your workforce with actionable insights transforms the customer experience and overall retail success.
• Market analysis: There’s a world of data outside your business that is certain to impact you, and AI can provide insights into market trends, competitor activity, and customer sentiment that will help you stay on top of demand and ahead of the competition.
• Risk assessment/scenario planning: While it’s impossible to say with 100% certainty what is around the corner, AI can make a huge difference by automatically assessing a wide range of possible risks, exploring different scenarios and potential outcomes, and providing the insight necessary to pivot when it’s time.
• Data visualization: Data that’s difficult to understand is of no help to anyone. But you can use AI to create visualizations and dashboards of critical business data (sales trends, supply chain issues, staff requirements, etc.) that help you quickly improve business performance and identify areas for improvement.

Where is your retail business in its “AI journey?” Have you begun? Are you keeping up with the competition? Do you have a plan for governance? Argano’s retail team can equip you with both the strategy and solutions to get the absolute most from AI in retail. It starts when you contact us.