Over the last few years, artificial intelligence has made interesting advancements across multiple industries. Nearly all the market segments and business domain are interested in artificial intelligence and want to harness this technology and methods to increase business benefits. While it may not be obvious for the customer, artificial intelligence is applied in the retail industry as well.
Artificial intelligence helps the retail sector tackle and solve a series of frustrating problems such as inaccurate inventory, overstretched and undertrained store associates, product placement and sub-optimal pricing. People are also investing in AI so that they can have cost-cutting in business operations in long terms (Scary as it may sound, but this move will create more jobs than it will eliminate).
With this part of the content, we highlight the few domains where AI is already being used.
- Customer satisfaction tracking
- Customer behaviour prediction
- Virtual fitting rooms
- Logistics and supply chain management
- Stores become cash-free
- Voice search
- Chatbots to provide customer service
- Price adjustment
- In-store assistance
- Visual search
Let us talk about the impact of AI in the retail sector. AI offers a power that helps retailers to reduce the cost, efficiently managing inventory and helps in improving customer’s experience. Artificial intelligence is impactful for the retail companies who are collecting customer data. Through that data and using AI, they can derive a meaningful conclusion. This can help the retailer to create personalized experience via highly-structured web-shops, intelligent in-store bots, and online chatbots.
After processing huge amounts of information from different sources, AI systems can identify viable solutions in a faster and better way.
There are few trends that we believe will be visible at scale in retail:
Digital or Robotic Assistance Will Be Reality
Technologies like AI, machine learning, deep learning and other IoT frameworks are making it easier to use a robot or a touch panels in retail stores which is giving power in the customer’s hand to get instant support that helps them to locate an item or get an answer to their queries, and any other support that may require an employee. This digital assistance can help the retailer to maintain the inventory.
Retailers are trying to communicate with shoppers through personalized online experiences by using conversational robots, chatbots and voice shopping.
In Japan, Pepper, a humanoid robot that can interact with customers and “perceive” human emotions, has already become quite popular and is also scaling up in some parts in the US.
Built-in 2010, the system was introduced in 140 SoftBank mobile stores.
There is another creative AI platform to enhance sales operations.
Conversica “sales assistant” software is designed to automate and enhance sales operations processes by identifying and conversing with internet leads. The sales lead and management company claims the authentic-sounding messages result in an average engagement rate of 35%.
There are also artificial intelligence chatbots that provide 24×7 customer service. It helps retailers to reduce their store staff. It not only reduces costs but attracts more buyers.
Virtual Trial Rooms
Technologies are all about creating a solution that reduces human efforts. While shopping for a new dress, trying different outfits can be time-consuming and frustrating. Virtual mirrors in the virtual trial room can help you try outfits without even changing your clothes. It also provides information on the available sizes and colors of the garment. Apart from that, it gives suggestions on matching garments to promote cross-sales of the items. It is one of the best ways to decrease the exchange rate and increase the conversion rate. To make the user feel good while trying the outfits, the lighting of the fitting room can also be adjusted. The mirror lets customers view, how the outfits look at different times of the day. This gives the user an idea about the outfit and thus leads to an informed decision.
Fashion e-retailer Farfetch launched a Store Of The Future platform for retailers, which allows businesses to collect customer data while browsing in-store. This is possible with the use of smart mirror technology installed in the fitting room that enables shoppers to request different sizes, colors or items. The customer’s information and shopping habits are then stored in Farfetch’s database so that the company can later access information about their style, previous purchases and browsing history.
A retail location with embedded AI technology is a great way to gain insights into customers’ preferences.
Increasing Customer Service via Chatbots
Retailers are facing cut-throat competition and the expectations of customers is increasing day by day. They need to find ways to gain customer loyalty and stay ahead of their competition. Many companies find a way by introducing chatbots for customer personalization and engagement.
Chatbots can be configured to answer questions, provide shopping suggestions and provide immediate support. Using a mixture of AI chatbots and humans, brands will be able to effectively handle customers and provide users with a better resolution of their problem. When customers will get immediate and personalized attention, they will engage deeply with the brand and enhanced customer loyalty.
Recognize Customers Through Face Recognition
A facial recognition system is a technology capable of identifying verifying a person from a digital image or a video frame from a video source. Retailers are turning to facial recognition to improve customer service, by identifying unique and repeat customers and also uses for security purposes.
Although, adopting facial recognition technology not only creates loyalty to customers but by increasing convenience you will also allow your employees to have better interaction. You are providing an enriching experience and a reason for in-person visits.
There is a process of creating a database through AI-camera analytics. Firstly, the person is detected through the CCTV Cameras in which the device is inbuilt.
Now the face recognition takes place after detecting a person.
Facial recognition extracts the geometry of the face or extracts the features from the detected face. These features can be face edges, alignment of nose, eyes, lips, etc., the distance from the eyes and the distance from forehead to chin. Through the use of algorithms, we identify facial landmarks and made keys to distinguish your face. The result: your facial signature.
And now, the facial signature is compared with the database of known faces. If matched then the person counts as a repeated customer.
If not, then the person is unique and the person is added in the database for future encounters.
In general, this is how the face recognition work to count the repeated customers.
One the basis of this Hershey plans to introduce an interactive sampler in their retail stores that give products after customers smile. They are doing this to enhance the in-store experience and increase their sales.
Even some nation’s government is using facial recognition in various ways.
The Chinese government uses it to make its forces more efficient, keep a better tab on people and business transactions. Over 170 million CCTV cameras guard the streets of China and most of them are powered by artificial intelligence (AI) and facial recognition. They again used the technology for the identification and conviction of criminals. However, this is not where it ends. Schools in China are using technology to evaluate student behaviour and measure their stress levels.
A world leader in adopting new technologies, UAE makes use of facial recognition technology in an incredibly smart manner. At the Dubai airport, a virtual aquarium is placed fitted with 80 facial recognition cameras. The aquarium scans faces of people who walk by and then either clears them for entry or raises a security concern. UAE plans to take it to the next level by 2020 by deploying automated immigration officers who will make use of AI and facial recognition to allow or deny entry.
Facial recognition won’t only change the retail industry, It will revolutionize it.
Digital Racks For Apparel and Fashion Products
Fashion has always been at the top of changing trends. From the invention of the sewing machine to the rise of E-commerce. And even today, tech is transforming fashion at a faster pace. From robots that sew and cut fabric to AI algorithms that predict style trends to VR mirrors in dressing rooms, technology is automating, and speeding up in every aspect of fashion.
Clothing and apparel brands are creating digital shelves and racks that has AI-powered gesture walls and monitors to enable easier choosing of the desired apparel without having to shuffle through the physical bulk of items. With this, customers will be quickly able to see which dress suits them and can easily browse through a lot more options. It will also solve the problem of space constraint to a wide extent. This way, retailers will provide their customers with millions of options even without keeping the items physically in front of them. Through this approach, it will also be possible to tell a lot about the customer’s behavior and pattern.
Traffic Count in Retail Store
In a competitive market, retailers and their managers don’t know how to increase their profits and they are optimizing all of their resources and continuously finding the opportunities to increase the numbers in their profits.
Traffic counting systems or people counters have been providing meaningful analytics that has helped retail chain stores of all sizes ranging from small, mid to large. Traffic counting is mainly done through footfall counting and with this other benefits are also given like finding age and gender on a real-time basis.
Footfall captures the flow of potential customers in real-time, so you can understand customers, their buying behaviour and trends. It is impossible to calculate it manually so with the use of artificial intelligence and deep learning, the retailers know many people have walked through the doors so that they can amplify the in-store experience and increase their sales.
All these technologies are made and adapted solely to increase in-store efficiency and improve in-store customer experiences in order to drive a profitable business.
But in past, retailers have struggled to give customers what they wanted. Because the amount of data that retailers needed to take into account to make favorable business decisions was immense and something would always be lost in the process of analyzing things manually.
That is why many of the retail chains who are now utilizing the potential of big data and AI are growing essentially. AI enables retailers to gather customer insights in an automated manner and make predictions based on identified patterns or previous images.
Artificial Intelligence will define a new era in the retail industry and help brands become more customer-centric.