I’ve been to dozens of retail-related conferences in the past year, most of which were attended by retailers, brands and early-growth companies seeking to gain traction in the retail ecosystem. Over the year, I’ve seen a continuous increase in the number of AI-driven technologies and companies showcasing solutions for retailers. I’ve also observed growing interest in these innovations among retailers. Why? Because as multichannel retailers continue to fight age-old problems such as inaccurate inventory, stockouts and overstocks, overstretched and undertrained store associates, and suboptimal pricing, advances in AI targeting these problems are proving their ROI.
AI, or machine intelligence, is human-like or intelligent behavior exhibited by computers and machines that are “trained” by data to make autonomous decisions. What does AI help us do that we couldn’t do previously? It helps us process enormous amounts of data, typically from multiple sources, to identify opportunities and solutions.
This post is the first of three that explore AI in retail. Here, I’ll cover the primary use cases for AI in customer-facing functions and share some examples of companies that have developed AI applications for retailers.
At Coresight Research, we’ve introduced the CORE framework for retail AI use cases, which refers to communication, optimization of pricing, rationalization of inventory and experiential retail. The framework illustrates how retailers can use AI to better engage customers through communication and experiences, better manage inventory, and price products optimally.
The CORE Framework for AI in Retail
Retailers are using AI to communicate with shoppers through personalized online experiences, conversational robots and chatbots, and voice shopping. Its usefulness in terms of personalization is my focus here.
Great e-commerce websites meet customers on customers’ own terms: they show shoppers what they want to see and provide the information they need in order to make decisions and purchases. Mobile devices, with their small screen sizes, make personalization even more critical. AI can help retailers make the best use of screen real estate on mobile devices, presenting highly relevant content for each consumer. It can generate millions of personalized home pages and email variations and personalize in-app experiences.