The Artificial intelligence (AI) scene is buzzing right now, with AI companies popping up like mushrooms after a good rain. It's definitely an exciting time to be alive, but it can also be a bit overwhelming. Still, you can't just observe from the sidelines; otherwise, you'll be left in the dust in no time

AI is transforming industries across the board, and retail is no exception. In this blog post, we're diving into the awesome world of AI to show retailers how they can use it to step up their game.

How many Retailers adopted AI so far?

Of course, AI adoption varies across industries and countries due to different regulations. However, based on McKinsey's worldwide survey on AI usage in April 2023, within the retail and consumer goods sector:

  • 7% Regularly use AI for work
  • 11% Regularly use AI for work and outside of work
  • 12% Use AI regularly outside of work
  • 40% Have tried AI
  • 26% Have not been exposed to AI yet
  • 4% Don’t know

While these figures aren't bad, there's still room for improvement. When gearing up for the future, make sure to include AI in your toolkit if it's not already there.

Why should Retailers use AI?

While of course, AI cannot replace human intelligence completely, AI still has unique capabilities such as:

Analyze extensive volumes of data

Compared to a human, AI can analyze large amounts of data quickly, efficiently, and accurately. This ability can save employees a lot of valuable time.

Identify Patterns

AI keeps learning and can easily access previous data, this gives AI the power to identify patterns quicker and notify when certain events are recurring.

Make predictions

As mentioned above, thanks to AI’s capabilities to analyze and use huge amounts of data at the same time, AI can be extremely good for making future predictions.

Automate repetitive tasks

AI can also be useful to automate tasks, especially those that are prone to human errors. Using this capability can enhance retail efficiency by reducing cost and labor and improving customer engagement.

However, a lot of people fear AI and technology because they believe it’s their competitor and it's here to take over their jobs. But AI isn’t an evil competitor but an assistant for you. AI can help you to utilize your time, skills, and efforts more efficiently.

How to use AI to improve Retail operations?

AI can assist with plenty of daily tasks. Here are the most typical ways AI is used in the retail industry:

Customer support

The amazing thing about AI is that like humans it constantly learning, hence, you can train AI to function as a customer support with your own business unique scenarios. This means you can use AI for common support issues that keep coming up over and over again, and dedicate your human support to the more complex cases where personal assistance is needed.

However, it's important to keep in mind that a lot of customers prefer human support over chatbox and auto-replies. This means you should use AI for general inquiries such as order status checks and general questions. But make sure you still have a representative available for your client if they need one.

This is a great example of how AI should assist human workers and not replace them. By using AI you can free your support representative from repetitive questions and inquiries and allow them to give maximal attention to the client who really needs their assistance.

AI recommendations

Another impactful application of AI involves enhancing customer engagement and experience through AI recommendations (AKA upselling). This is achievable both in stores and online. Depending on the customer's preferences and selected items, the AI can recommend complementary pieces or propose more items of the same type, additional color options, and more.

This represents a highly potent advantage for retailers to boost sales while providing customers a personalized shopping experience. By integrating smart fitting rooms, and smart mirrors/screens, and leveraging online purchase history, the AI can tailor recommendations to individual clients. It can also provide exclusive deals on items relevant to their preferences or past expressions of interest.

Demand forecasting

Predicting demand is a complex task, but fortunately, AI can assist in this process. Thanks to its proficiency in thorough data analysis, especially in reviewing past sales across seasons and identifying trends based on customer traits, AI excels at making accurate, data-driven predictions. This is very important to keep track of customer’s ever-changing demand.

Inventory management

AI can also be very useful for retail inventory management especially when synergizing with Radio-Frequency Identification (RFID). This technology brings a new level of precision, allowing retailers to monitor their stock in real time. RFID tags on products communicate seamlessly with AI systems, providing instant updates on item location, availability, and movement.

The integration of RFID with AI streamlines inventory tasks, from monitoring stock levels to anticipating reorder needs. It enhances the accuracy of data, reducing the likelihood of discrepancies.

Furthermore, AI algorithms analyze historical data, taking into account various factors such as seasonal trends, customer preferences, and even external influences. This foresight empowers retailers to make informed decisions, ensuring that shelves are stocked with the right products at the right time.

In essence, AI, coupled with RFID technology, transforms inventory management into a proactive and intelligent process. It's not just about knowing what's on the shelves today; it's about anticipating what should be on the shelves tomorrow.

In conclusion, the world is experiencing a dynamic shift with the widespread adoption of AI. As we've explored the current landscape and discussed the compelling reasons for integrating AI into retail operations, it's evident that AI is more than just a trend – it's a crucial tool for staying competitive.

From efficiently analyzing data and identifying patterns to making accurate predictions and streamlining operations, AI offers unparalleled benefits. Despite concerns, AI isn't a threat; it's a valuable assistant, enhancing efficiency and customer engagement. For retailers looking to stay ahead, recognizing and embracing the potential of AI is key to future success.