The application of the technology in retail saved up to $340 billion each year for the industry by 2020 according to a retail executives survey by Capgemini at the AI in Retail Conference. And 80% of these savings will come from AI’s improvement of supply chain management and returns. The global market for Retail AI for Business is expected to grow to over $5 million by 2022.
Retail industry was less impacted by Covid-19 in comparison to other industries, driven by the rapid growth of online retail businesses. Before, COVID-19 pandemic, nearly 80% of buyers are used to buying goods in physical stores. But when the outbreak of covid occurred, customers are likely to get their products through online shopping due to quarantine orders.
Whether for online or offline shopping, Artificial Intelligence solutions have plenty of room to grow ever. For a moment, we can already present to you some examples of real-world AI applications with proven business value. Here is how AI is changing retail industry, both online and offline, in the future, especially in the post-covid recovery phase.
Robots themselves can locate Items
Due to social distancing orders during the pandemic, all stores have to limit the number of employees in stores to a certain amount which leads to a lack of staff to assist customers sometimes. Lowes successfully addressed this issue with “LoweBot” that can help customers find their way around the store and get the items they need. LoweBots roam the store and ask customers simple questions to find out what they’re looking for and then they will provide directions and maps to products and share specialty knowledge with customers. The most impressive thing is that LoweBots can work with different languages.
Stores can become cashier-free.
Do you know robots can replace the position of cashier? The robotization of stores will result in reducing lines, lowering the number of human employees, and significant savings on operational expenses. Amazon AI has already introduced checkout-free stores. The Amazon Go and Just Walk Out Shopping technology reacts when you take something from the shelf or put it back. When you walk out of the shop with products, the Amazon account will take money for your purchase. Amazon wants to make more shops driven by Artificial Intelligence like Amazon Go, where only six to twenty human staff members are needed.
Using AI Technology to Diagnose Covid-19 Pandemic
Hekate and its real-life AI applications
Intelligent Product Searches/ Visual Search
Artificial intelligence in retail can also simplify product discovery for customers. Instead of manually typing products’ characteristics and features, customers can now take a picture of a product they like in the real world and then use the picture to search for a retailer selling it on the web. Machine learning retail software can classify millions of items from various sellers and categorize them for customers within seconds, making product search and comparison easier than ever.
Lovethesales, an online shopping website, is using this model efficiently to help customers find the best deal from retailers.
Supply chain and inventory management
Failure in supply chain as well as inventory management leads to losses for retailers around the world in the amount of about $1.1 trillion every year. Leftovers, out-of-stock scenarios, or expired products are really common in retailers and these scenarios now can be eliminated with AI. Retail owners can use AI for restocking and calculating the demand for a particular product by taking into account a history of sales, location, weather, trends, promotions, and other parameters. Morrisons, a supermarket chain in UK, has made a better situation with stock forecasting and replenishment in 491 stores with the help of machine learning algorithms. It resulted in an up to 30% reduction of in-store shelf gaps.
Price adjustments and prediction
Applications of AI could help retail businesses predict prices for their products, visualizing the likely outcomes of multiple pricing strategies. To be able to execute this, systems collect information about other products, promotional activities, sales figures, and additional data. Thereby, business owners can present the best offers and get new customers and boost sales as a result. eBay and Kroger already apply Artificial Intelligence for their price optimization and stay flexible with their ability to adjust prices and promotions according to the information obtained.
Above discussed AI applications not only offer more profits but also boost brand image for retailers thanks to customers experiences enhancement. As with many areas of AI innovation that are led by bigger industry players, the future of the retail industry will likely witness stores with 70% of staff being robots. In addition, AI applications will increase customers’ satisfaction thanks to fast service processing speed and constant support from robots. From retailers’ perspective, they become more productive in management, security, and pricing to gain more profits. Online shopping will also become a major activity in the future because of its convenience.