So What Exactly Can Artificial Intelligence Do For Your Business?
The machines are taking over! Well, maybe not quite. But from all the buzz around Artificial Intelligence (AI) and the hype around smart machines, sometimes you start to wonder what might be around the corner.
There’s no question that AI is a big deal. In retail alone, what was a $5bn global industry in AI applications in 2021 is forecast to rocket to $30bn by 2028. Big hitters like Amazon and Walmart are sure going big with their futuristic, AI-powered store concepts.
But as an average store owner, concepts like checkout-less stores where customers simply grab what they want off a shelf and are billed automatically through an app can seem disconnected from present realities. Doesn’t AI just mean a lot of expensive cutting edge tech that’s out of your reach? What does AI have to offer you and your customers, not in some far-off future, but in the here and now?
Addressing the issue of cost first, the good news is that AI isn’t all about having intelligent robots stacking your shelves and serving your customers. In fact, AI has much more to do with software and data analytics, about finding new ways to use data to improve how your business operates.
Even now, you can access thousands of affordable AI-driven applications in the cloud that will add layers of data-fuelled intelligence to different areas of your operations.
So what might these benefits look like? Here are three ways that AI is already having a major impact on retail.
Nothing leaves a customer more disgruntled than walking into a store looking to buy a particular item, only to find it’s out of stock. Many will simply walk straight back out rather than ask a clerk if there are any in the backroom.
One of the key focuses of Walmart’s high-profile Intelligent Retail Lab (IRL), a test store for AI applications, is using technology to optimize inventory and make sure items are already on shelf, priced right and ready to go. But while Walmart is seeking perfection on this, you can already boost stock availability with simple AI tools that link sales to inventory.
By scanning items as they are put out on shelf, the system knows how many are available. As each sale is chalked off this number, an AI bot can calculate how long until stockout based on current sales volumes, and issue a restock warning in plenty of time. Simple.
Ever wondered why items placed on certain shelves seem to sell faster than others? It’s a known fact that store layout and how products are arranged in relation to one another influences people’s purchasing decisions.
If you can identify ‘hot’ and ‘cold’ spots for where customer traffic is highest and where they spend more time browsing items, you can do things like change the layout of your store to reduce the number of cold spots. Or put your highest yield products where they are most likely to sell. Or strategically locate promotions, and so on and so on.
This kind of intelligent merchandising is made possible by computer vision. Or linking your in-store cameras to AI software that takes hours of video of customers moving around your store and analyzing their behavior in depth.
Smart product recommendations
They say the art of selling is being able to decode exactly what the customer wants and present them with the ideal option. In the past, that was left to the craft of the skilled salesperson. But AI is more likely to hit the right spot, more of the time.
Take North Face’s coat matching app which uses a questionnaire about what the customer wants from a coat to make personalized recommendations. The system can draw on data from millions of coat sales to make the match, using the science of probability to offer something it is pretty sure the customer will love.
Or another example is beauty brands like Sephora using AI face-scanning technology to match a customer’s skin tone to the perfect make-up products. Again, the key is using data to personalize the offer with pin-point accuracy.
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