This article is the winning entry of the April’s QuriousWriter blog contest
The digital age has raised consumer expectations where they seek personalized products and services, and quick redressal of their needs. In such a scenario, artificial intelligence (AI) solutions enable retailers to align their offerings with the customers’ expectations and provide them with a competitive edge.
The AI in retail market is expected to reach $10.90 billion by 2026, at a CAGR of 35% over the forecast period 2021 to 2026. The rapidly evolving customer needs and shifting consumer behavior are driving this growth. To help you understand these changes and stay relevant, Quantiphi helps retailers understand and adopt the power of AI.
Factors driving adoption of AI in retail
Insights from data
One of the primary uses of AI is processing and managing vast quantities of data that retail businesses capture everyday. Extracting insights from the product data is a challenge for retailers. Leveraging AI saves time, effort, and cost while removing the backlogs of various unstructured data.
AI technologies structure the data by adding descriptions and categories along with a consistent format. AI also enables retailers to manage inventory better, forecast sales with improved accuracy, and order products accordingly.
AI in retail allows you to leverage data to fuel your business decisions and improve sales outcomes.
Hyper-personalization
AI solutions in retail can offer a personalized shopping experience to customers through targeted content, hyper-personalized recommendations, and web-page personalization. Advanced AI algorithms track customer demographic data, online engagements, and digital footprints to understand their buying behaviour and offer hyper-personalized marketing. This enables brands to create bespoke customer experiences.
New direct-to-consumer entrants
The surge in online shopping encouraged new retailers and brands to foray into the market. For instance, Alibaba has added almost 300 million active buyers in the last five years. These new direct-to-consumer entrants are driving the old players to find ways to stay relevant and ahead of the game.
Retailer challenges and solutions with AI
AI transforms the major retail workflows, thereby improving efficiency and increasing revenues:
- Demand forecasting
- Intelligent pricing
- Marketing analytics
- Targeted advertising and promotions
- Inventory management
AI in retail benefits
With AI already enhancing both online and offline retail experience, the benefits of AI to the retail industry are manifold.
- Enhanced order processing
AI can manage all the aspects of the retail supply chain, such as inventory, distribution, and delivery, in real-time efficiently. AI-enabled demand forecasting is autonomous, scalable, and accurate. These forecasts also take into account dynamic factors such as price, promotion, seasonality, events, and weather. - Less cumbersome dependability
An important aspect of implementing AI is to eliminate or lessen the dependencies on outer resources.
There are plenty of retailers along with distributors who hire third-party agencies for completing tasks such as content validation, data enrichment, organization of data into custom stuff, editing, and others.
With AI, retailers can effectively automate the entire onboarding process for the suppliers. This effectively streamlines the process and makes work a lot faster and less time-consuming. - Scaling becomes easier
With the help of AI, suppliers can effortlessly onboard a massive array of products that will grow the distributor along with the retailer catalog to a great extent. For any retail business that is trying to compete in such a changing environment, AI is a must have solution. With the help of automation, workloads can be done faster and in an efficient way. - Chatbots for improved customer experience
Conversational AI-powered chatbots communicate with customers effectively and address their queries faster. These bots can answer frequently asked questions, give recommendations, and collect feedback as well as valuable data from the customers. The chatbots are programmed to self-learn from past data to improve their accuracy and interactions with the customers.
The future Is AI
By adding AI capabilities to your retail workflows, you can turn data into actionable insights. These automated solutions enable hyper-personalized experiences, accurate product recommendations, improved forecasts, and better inventory management, improving the overall business value.
To learn how to use AI to power your retail decision-making, get in touch with us.
