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5 Ways to Utilize Artificial Intelligence in Retail for Enhancing In-store Customer Experience

Providing an enhanced in-store experience with personalized recommendations, offers, and product support — as per age, gender, location, and behavior of customers is the next big thing in retail. Artificial intelligence is the most sought-after technology among retailers to achieve this objective. Here are five ways to deploy artificial intelligence solutions in retail for enhancing in-store customer experience.

The retail industry has seen a surge in technological advances over the last decade. After being influenced by the ecommerce revolution, the retail industry has been instrumental in adopting and innovating new technologies into the market. With the onset of new technologies like IoT, mobile, and AI, most of the retail giants have realized the potential to exploit these technologies for transforming their retail operation and customer experience.

When we talk about IoT technologies in retail, several use cases are mainly focused on supply chain and operational efficiencies. IoT and connected devices help retailers in Radio-Frequency Identification (RFID) inventory tracking chips, tracking in-store infrared foot traffic, smart selling through kiosks, and surveillance through camera sensors. However, when it comes to enabling advanced customer services and experience, most retailers are looking at implementing innovative and smart technologies. Mobile is one of the main channels bridging the gap between digital and in-store experience; hence, store operators utilize mobile technologies to enhance customer experience. 70% of shoppers in the USA say that they use their mobile devices while shopping in-store, either occasionally or on a regular basis. However, retailers need smart and innovative technology to augment customer experience across all stages — from a store visit to post-sale customer service. 

Artificial Intelligence can be a potential game-changer for most of the retail giants. With AI-enabled retail solutions, complex computational processes like capturing product weight, and temperature can be comprehended with a set of algorithms to provide seamless customer interaction and experience. It is believed that AI in retail has a humongous power to transform the retail industry in a way that will make the customer journey more intuitive through ease of interaction with products and experience. According to reports, 95% of customer relations is estimated to be powered by AI by 2025. Moreover, now with IoT and AI, retailers can focus on omnichannel customer experience. 

Why should Retail use AI?

AI can help retail stores in various ways. Firstly, AI-based systems can eliminate manual guesswork for activities like conducting product promotions, inventory assortments, and identifying supply chain complexities. Major retailers are already experimenting with the use and possible applications of AI in the above fields. Some are even aiming to anticipate customers’ orders and goods to be shipped without waiting for actual purchase confirmation. 

It helps customers make smarter decisions with better accuracy and real-time forecasting. Good forecasts also help retailers optimize supply chain, create impactful promotion strategies and improve customer experience.

AI also makes operations very efficient using robotics, process automation, and optimization. This greatly enhances productivity and reduces manual labor cost.

Lastly, retail is competing with ecommerce, where data generated by users is easily captured online. So, AI becomes an indispensable tool to capture heterogeneous data generated by customers in a retail store. Making coherence of in-store customer from multiple resources is of utmost importance. Customers just do not try, buy and leave but even use their smartphones to assist them when they shop in brick-and-mortar stores to check prices, read product reviews, and share on social media to get confidence in their purchase decision.

Let us understand how AI can enable smart retail solutions

1) Personalized In-store Recommendations:

Imagine a customer is checking a certain item at a store and you can send a personalized recommendation on his/her phone for a product that suits his/her requirements. One way to do this is through retail store mobile apps. Once a customer enters the store and opens the store app, the in-store sensors can identify and track the customer activities and behaviors. The in-store AI can also find when the customer had last visited the store and track the multiple visits and the products bought in the past. AI can use this information to suggest good recommendations and offer personalized rewards like discounts, loyalty points, etc., for the current shopping needs.

2) Personalized Out-store Recommendations:

AI cannot only help you engage your customers while they are in store but also when they are outside the store. AI-enabled store apps can help you understand a lot about your customer purchases and preferences through the already-collected data. Therefore, this data can help you target your marketing campaigns or product advertisements to specific customers and bring them back to stores, thus maximizing their cart value.

Why are recommendations important?

Let us understand the history of the recommendation engine and its impact. 

Amazon was the first to bring the recommendation engine in early 2000 and its rise thereafter has been phenomenal. The recommendation engine attributes to 35% of Amazon’s product sale. Another case is JD Sports, which launched a recommendation engine for its outdoor brand, Millets. As a result, their conversion rates increased by 332% and the proportionate site revenue from product recommendations is now almost a fifth of all sales. So, neglecting recommendation engines is not advisable. Overall, 50% of online sales now happen through mobile with a dramatic YoY increase. Retailers should implement recommendation engines and start channelizing customers with store apps. 

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3) Intelligent Customer Experience:

AI-powered devices like kiosks and digital signage units can recognize shoppers and adapt the in-store product displays. In addition, AI-powered automated assistants can study customer behavior and help build confidence in their purchase decision by recommending products based on the shoppers’ needs, preferences, and fit.

During PoS checkout or interaction with salespersons, AI-powered devices like voice-enabled cameras can recognize and interpret facial, biometric and audible cues. Capturing shoppers’ in-the-moment emotions, reactions or interactions can help deliver appropriate products, recommendations or support. This ensures that the retail engagement does not miss its mark.

4) Visual Search and Listen:

Image recognition is the most rapidly expanding areas in AI. The primary benefit for retailers here is to allow customers to search for things in the store without having to walk around. An AI-powered kiosk can search for a product in-store using an image provided by the customers and notify similar products with their exact location in the store. AI-powered mirrors can also suggest accessories and designs, capturing customers’ expressions. Visual listen is a technique that examines photos on social media and understands what customers are sharing about their products and brands.

5)  Voice Assistants:

Amazon Alexa, Apple’s Siri, and Google Assistant are becoming mature with the evolution of better machine learning algorithms and models. These AI-enabled voice assistants can be used easily in retail stores to assist customers at the shelves, trial rooms, and self-checkouts. Voice assistants can have one-to-one communication with customers to improve their personal shopping experience.

Example: A customer at a smart shelf can say “Hey, can you give more information about this brand?”

Mentioned above are some of the innovative use cases of AI in retail that a few retail giants have already started implementing for enhancing in-store customer experience.+

6. Predictive Analytics 

AI can examine huge amounts of data and help in forecasting customer behavior. It can predict if a customer will encounter a problem based on the usage behavior. By promptly and precisely resolving problems, this proactive strategy increases customer satisfaction. Retailers can provide more individualized offers and recommendations with predictive analytics, strengthening their relationship with customers. AI is being seamlessly incorporated into retail, which increases sales and customer loyalty while streamlining support procedures. It’s revolutionary and will influence retail customer service in the future. 

7. Inventory Management

 For merchants to avoid excess inventory, which can lead to higher management expenses and markdowns, and to maintain a balance between having enough stock, effective inventory management is essential. Successful retailers of today use AI to maximize inventory levels, improve stock management, and decrease overstocking and stockouts. 

With the analysis of the market, consumers, and the competitor data, AIin retail enhances demand forecasting. AI business intelligence solutions make proactive modifications to a company’s marketing, merchandising, and business strategies by utilizing this data to forecast changes in the industry.  

One prominent example of a company using AI to improve inventory management is Walmart. Located atop floor scrubbers, their “inventory intelligence towers” system takes more than 20 million pictures of products on shelves daily. Through analyzing these photos, AI algorithms can determine inventory levels with over 95% accuracy and identify individual brands on the shelves. It successfully illustrates how AI can be applied to maximize the harmony between inventory levels and operational effectiveness. 

 

enhance in-store customer experience

Mentioned above are some of the innovative use cases of AI in retail that a few retail giants have already started implementing to enhance in-store customer experience. 

 

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Bottomline 

AI is at the forefront of the retail industry and offers effective solutions from intelligent customer experience, and inventory management to sophisticated forecasting of customer behavior with predictive analytics. AI with its ability to examine huge amounts of data, gauge customer behavior patterns and choices, and forecast future trends has become a valuable resource for retail businesses. As features progress, the integration of AI in the retail business is expected to become the most important way for retailers to remain competitive and create unmatched consumer experiences. 

eInfochips, an Arrow company provides AI-powered audio/video/image and data analytics for multiple industries such as transportation, manufacturing, and retail covering the most common use cases for surveillance, security, and customer intelligence. We are also an Advanced Consulting Partner for AWS services. We help clients in implementing a highly-scalable, reliable, and cost-efficient infrastructure with custom solutions for AI plus IoT. Know more about our AWS Consulting & Development Services.

Picture of Rakesh Nakod

Rakesh Nakod

Rakesh Nakod works as Product Manager at eInfochips, focusing on Artificial Intelligence / Machine Learning based products and services. Rakesh has 5+ years of experience in product development and services in AI/ML domain. He holds an MCA (Science) degree from Fergusson College, Pune. His keen interests are studying design and implementation of algorithms in computer vision, NLP & data mining .

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