20 Nov 2022| ONPASSIVE
AI puts Retail Growth in Overdrive Mode
In this digital age, artificial intelligence (AI) is making its presence felt in almost everywhere. It has also crept into the retail sector. Traditional retailers facing the brunt of online retailers have started to onboard artificial intelligence in retail to woo shoppers who take a multichannel approach to make purchases. With customer experience (CX) becoming ever-important, significant retailers have employed chatbots to maximize CX.
It is said that by 2022, the global spend on AI in retail will cross $7.3 billion. The retail industry is banking on AI for search, recommendation engines for content, and data science. Many retailers have resorted to building AI engines with open-source tools believing that there’s vast potential for them with AI incorporated in their business.
As per a recent survey, retailers can save $340 billion annually by 2022 by streamlining efficiency in several processes and operations with AI incorporated in their business. Here are some reasons retailers are turning to AI:
As per an IBM report which surveyed 1900 retail and consumer product firms across 23 countries, 85% of the retail firms plan to implement intelligent automation and machine learning for the supply chain by 2021. Retailers think to see a 10% spurt in annual growth with the introduction of artificial intelligence in retail.
AI is retail is capable enough to help firms market their products based on consumer’s past purchases and search habits, converting into excellent CX. In the retail industry, customer service is paramount for a successful business.
Hence, it is essential to have a practical service solution, and making customer service better is AI’s primary task. AI-enabled bots can give product recommendations based on your search history, thus making the overall experience a lot more interactive.
Every retailer follows the MAP process. The Minimum Advertised Price (MAP) is the lowest price that a retailer can advertise the product for sale. Any product sold at a price lesser than the MAP can severely affect the business. AI is used in retail analytics firms and intelligence nodes to help the brands selling online to prevent the violation of MAP pricing.
AI helps retail firms to accumulate better and organize the vast amount of data it has procured over a while. It is this data that allows AI, in turn, to draw a conclusion and personalize the shopping experience for users. The information which retailers accumulate helps them make better informed and strategic decisions.
Retailers can run targeted marketing campaigns using AI algorithms by creating customer-specific ads based on region, preference, purchase habits, and so on. Such targeted marketing campaigns can increase the conversion rate significantly and also improves customer loyalty and customer retention. Customer retention helps big time for retailers as 80 % of future profit comes from 20 % of the existing customers.
There is not an ounce of doubt that the retail industry will progress immensely with AI thrown into the mix. The points mentioned in the blog gives a heads-up of AI is changing the face of the retail sector. Retailers can stay relevant and in the competition only if they let AI assist them in the industry.
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Tags: Technology Artificial Intelligence