Future of Retail-Retail is a fast-moving sector, and success in the industry means keeping up with technologies. Artificial intelligence (AI) is one of them, and evidence shows it’s the future of retail. Here are four reasons why:
1. AI Offers Diverse Usage Possibilities
Retailers often feel understandably reluctant to give emerging technologies a try unless they feel extremely confident in the eventual payoff. Capgemini Research Institute took an in-depth look at AI’s impact on retail, and the comprehensive study revealed numerous exciting things. For starters, there’s a growing number of retailers implementing AI in their organizations. And they focus on customer-facing applications in nearly three-fourths of cases. Furthermore, the study also showed that if retailers branched out and deployed AI across their operations, they could save more than $340 billion by 2022.
As an example of where those savings might originate, the paper’s authors gave an example of Otto, a German e-commerce brand that uses AI to predict consumer purchasing patterns. Otto cuts down on returns by more than 2 million items annually by making more accurate suggestions to shoppers.
Other companies use AI to prepare packages within warehouses or distribution centers by implementing the technology into item picker assistants that workers use while restocking shelves or getting items ready to ship. Due to the assortment of options offered and the certainty of more on the horizon, retailers have no shortage of ways to work with the technology. That helps ensure AI’s staying power.
2. Customers Want the Personalization AI Can Give
The brief mention above of using AI to slash return rates is only one example of how the technology can help personalize the shopping experience. Research from Epsilon showed 80 percent of respondents said they were more likely to do business with companies that offer personalization, and 90 percent indicated they found personalization appealing.
That’s not surprising when retail professionals take a moment to recall past trends that led to this point. For example, subscription boxes were a top trend of 2017, and many of them that are still popular today use personalization to some extent.
Birchbox is a well-known beauty product subscription box that lets people make a choice for at least one of the items in their monthly box or pick from an assortment of free samples when buying something from the Birchbox store. Customers can also indicate a preference toward all-natural items or items for curly hair, for example.