Workforce 4.0

AI in Retail:
Three Trends to Watch

Today’s generation of shoppers is growing more used to having AI involved in their transactions. Among customers, 80% expect bots and AI to improve experiences, according to a report by Verint. Buyers aren’t surprised to see digital tools helping them while they shop online through their device, via voice activation, or in a store.

There are a growing number of ways that retailers can use AI to offer customers the level of service they’re looking for. Here are three AI trends to watch for in retail:

1. Hyper-personalization at Scale

There is so much data available today; the key is to sort through it and use it to make decisions. With AI, retailers can use machine learning algorithms to analyze past purchases of customers, along with their browsing history and demographic details. This information can then be used to suggest products that are most relevant to each customer. In addition, assets can be created with Generative AI to personalize every communication to the customer.

With AI, agents might also offer insights into up-and-coming trends and products that they think align with the shopper’s tastes. Personalized messaging can be inserted into targeted email campaigns, on websites, or in other customized marketing activities. When customers feel they are being treated as an individual, they may feel a sense of loyalty to a brand.

Moreover, AI can elevate in-store shopping experiences for customers by using technologies like computer vision and facial recognition. By tracking customer movements and interactions within physical stores, retailers can gather valuable insights into consumer behavior.

2. Automated Customer Service

When asked about AI, 52.4% of customers believed that the use of AI will improve customer service, according to MarTech. These days, virtual assistants are able to understand natural language and context, which makes it possible to have ongoing conversations with customers and provide a level of service that wasn’t possible in the past. Shoppers can receive 24/7 support and may have their questions answered right away.

The notable aspect of this trend is that you need both high quality data and an integrated ecosystem. If the AI can only access limited information, and not perform any actions, it will be far less useful to customers, and they will do everything they can to bypass it. Instead, make sure the bot has access to order information, case details, customer preferences, and more so it can understand the customer. Little is more frustrating than a company that knows everything and yet isn’t able to apply it to customer service.

Finally, action is key. The bot should be able to open new service cases for humans, be able to cancel orders (using business rules), and other common use cases. Bots are as smart as you make them.

3. Supply Chain Optimization

With AI, retailers can further streamline operations, minimize costs, and increase efficiency in their distribution network. Today’s technologies carry out demand forecasting, which can help prevent retailers from purchasing too many items or too few. If the data shows that customers will no longer be interested in a specific product in the future, retailers might reduce their orders. Companies may be alerted to purchase more of an item due to an expectation of growing demand.

Moreover, AI tools help companies monitor equipment and schedule maintenance to prevent breakdowns. Systems can track delivery services in real-time. With data analytics and machine learning, drivers can find the best delivery routes that minimize transportation costs and make sure products get dropped off in a timely manner.

Going forward, we can expect AI to continue to revamp the retail industry. It will help retailers to create more personalized experiences and provide more sophisticated customer service. Companies will be able to reduce slowdowns and inefficiencies in their supply chain. If AI can truly help customers, there can be positive effects. The best way to approach these trends is to focus on serving the customer, and then the use of AI will be clear.

Gerard Szatvanyi

Author: Gerard Szatvanyi

As a founding member and CEO of OSF Digital, Gerry has more than 15 years of experience managing start-ups and medium-size IT businesses and driving them to peak performance. With background in Enterprise Applications, IT Services and Consultancy, Gerry's impressive client and business portfolio sets him in the new breed for global entrepreneurship.