When you operate a retail establishment, your number one reason for remaining in business is to achieve profitability. And before you can be profitable, you must master how to operate productively and efficiently. Fortunately, you now have the ultimate advantage to make magic happen for your store’s bottom line: You have artificial intelligence, or AI, on your side.
Research shows that the market for global AI in retail is expected to balloon from just under $5 billion to more than $31 billion between 2021 and 2028. So, if you haven’t hopped on the AI bandwagon, you may soon be left behind in the dust of this industry’s digital revolution and transformation.
The question is, how exactly is AI transforming the retail industry? Here’s a rundown on everything you need to know about AI’s impact on the retail sector in 2022 and beyond.
One of the biggest ways that AI is transforming the retail industry is by automating tasks previously performed by in-person workers. This allows your employees to spend less time focusing on menial duties and more time solving complex customer problems. And this can instantly improve your customer experience, in turn improving your sales and profitability.
2. Loss Prevention
AI has also become an important loss prevention component, particularly when it comes to self-checkout technologies. For instance, AI is incorporated into self-checkout stations’ scanning and video systems to gather insights regarding how theft happens. The AI is designed to flag any suspicious transactions or even alert your staff to shoplifting that is potentially happening in real-time.
Note, though, that a reputable retail security system additionally protects its assets without compromising customers’ privacy. Rather than logging data on suspected shoplifters without customers’ consent, authentication only logs the data of authorized personnel who have opted into the system. This way, you can respect your customers’ privacy while still optimizing your retail store’s security and minimizing your financial losses.
3. Market Demand Prediction
With AI, you can also predict future customer and market demands more easily, which will enable you to better meet your customers’ needs. For instance, AI can help you view consumers’ previous behavioral patterns, then make predictions regarding future behavior. You can also find out which areas of your physical store hold the attention of customers for longer periods.
If you run an online business rather than having a physical store open to the public, AI can also provide you with information about your website visitor count and the user demographics. Then, you can utilize this data to make informed marketing decisions. For example, the data you gain can help you to tailor your next advertising campaign in a way that best matches your customers’ interests and needs
4. Supply Chain Optimization
AI also has the ability to help you optimize your store’s supply chain. As an example, this technology can review your past customers’ buying patterns and let you know right away when you’ll be running out of certain products. This is critical because if your customers aren’t confident that you’ll have the items they need at any given time, they may choose another establishment. And that means lost sales, dealing a blow to your bottom line.
AI can also tell you which times during the year more customers will demand certain items. This means you can begin stocking up early rather than scrambling to secure and display these seasonally popular products when customers begin to inquire about them.
5. Enhancing the Customer Experience
Finally, AI is transforming the retail industry by making it easier for you to keep your customers happy. The AI technology of chatbots, for example, can help customers with store navigation and even provide extremely personalized product suggestions.
With a chatbot, customers can quickly find the products they’re looking for without even having to browse through your entire physical store or website. In addition, your chatbot can recommend products that go well together—such as certain dresses and shoes, or certain cheeses and wines.
If you are a clothing retailer, you can even use AI to allow customers to upload photos of their desired outfits and then suggest similar clothing from your store. This will immediately enhance the customer experience and therefore keep customers returning to you for their clothing needs from one season to the next.
Tap into the Power of AI in Your Retail Business Today
AI is revolutionizing how retailers operate—and for the better. With AI, you put your store in a better position to make smarter decisions, boost sales, and ultimately enhance customer retention. So, now couldn’t be a better time to begin implementing AI in your daily functions.
Consider the many above mentioned benefits of AI as you explore how to incorporate this technology into your retail establishment. With the right AI tools, you can be well on your way to achieving a whole new level of business growth in the months and years ahead.
Aaron Smith is an LA-based content strategist and consultant in support of STEM firms and medical practices. He covers industry developments and helps companies connect with clients. In his free time, Aaron enjoys swimming, swing dancing, and sci-fi novels.