It seems that we are seeing AI in virtually every industry. Retail is no exception. It’s likely that many consumers are already familiar with some of these functions, not fully realizing they are powered by AI technology.
How AI is Being Used in Retail
Let’s take a closer look at some of the ways we have been seeing AI influence the retail industry, employees, and customers alike.
Personalized Algorithms
If you have social media of any kind, or are a consumer in any online space, you have more than likely been targeted by a personalized ad related to a previous purchase, or even your browsing history.
These recommendations you receive are powered by AI algorithms that analyze consumer data and purchase history. Mainly, these ads are meant to pique consumer interest, driving users to make additional purchases, and generate more revenue for the company.
Inventory Management Systems
Using very similar AI-powered algorithms that examine consumer data, modern inventory management systems are emerging. These systems analyze seasonal sales data, market trends, and other relevant factors to predict consumer behavior.
While these systems will likely always need the oversight of inventory specialists to be the most accurate, they are expected to make forecasting demand and streamlining inventory processes more efficient. These systems can also make the restocking process faster, and reduce the amount of excess inventory at the end of each season.
“Try Before You Buy” Augmented Reality
AI and AR (augmented reality) technologies have begun automated “try-on” experiences, allowing consumers to essentially try products before making their purchase. This is especially helpful when it comes to online shopping or e-commerce.
For instance, there are some sunglasses brands that allow consumers to upload a photo of their face, and select the glasses they are interested in “trying on”. There are even some furniture companies that allow users to upload a photo of a room in their home, and insert the furniture piece they’re interested in. These augmented reality features offer a great way for companies to boost online sales of products a consumer may normally not purchase online.
Dynamic Pricing
Dynamic pricing is a pricing strategy in which a variable price is applied to products instead of a fixed one. Retailers adjust prices to capitalize on the ever-changing market. In terms of dynamic pricing, AI’s relevance is in its quick and reliable market analysis.
AI algorithms can examine market conditions, competitor pricing, and consumer demand/trends to suggest price adjustments. This function is expected to maximize company revenue by optimizing prices according to real-time demand and data.
Customer Service Chatbots
Recognized by many, these chatbots are a form of AI that we often see in the online consumer space to assist customers with various needs. Chatbots are equipped with natural language processing capabilities (NLP), which provide automated customer support.
Chatbots are especially useful to businesses outside of typical 9-5 business hours. Generally speaking, chatbots are available round-the-clock to answer common customer questions, assist with product recommendations, and even perform basic services and handle common requests (such as returns). With their availability 24/7, chatbots effectively fulfill consumers’ needs, aligning with the expectations of a society accustomed to instant gratification.
As with many other industries, the implementation of AI in retail is expected to have a notable impact. Not only are these changes integrated to make the lives of consumers easier, but are set to enhance the industry as a whole.
Listed above are just some of the many ways we can expect to see AI being used in retail.
Looking for a Retail Job?
Look no further! We work with stores across the country to connect the best prospective retail employees with the best retailers. It’s likely that many of the brands we work with have implemented some (or many) of these newer AI-powered practices.
Step into the modernized retail world today and find a job near you!
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