Artificial intelligence (AI) is surging in popularity and use cases globally across countless industries. The retail sector, in particular, is one industry where AI is making an impact.
AI in the global retail market is predicted to grow at a compound annual growth rate of 37.5% between 2022 and 2030, underscoring the potential this advanced technology has to impact retail operations.
So what is the future of artificial intelligence in retail, and how can it help drive more sales and better customer experiences across the industry?
What retail sales-related tasks can AI most effectively handle?
Currently, AI in retail excels at handling repetitive and easily automated tasks like checking stock inventories and allowing customers to scan and pay for their items without a staff member.
AI can also help answer customer queries, whether they are frequently asked or more difficult questions. For example, if a customer comes to the store with a photo of an item they like, AI—backed by powerful machine learning technology—can identify the product and potentially recommend similar products that may be available for purchase.
At a more strategic level, AI makes it easier to access and analyze data to make informed business decisions quickly. Businesses can optimize pricing strategy by factoring in consumer demand, competitive products and seasonal trends. The future of artificial intelligence in retail will likely see more efficient supply chain management as factors such as buying trends, historical sales, and location are analyzed to better predict customer demand.
Shopping behavior and consumer interests
There are several fascinating trends in AI retail that can help companies better understand their customers' behavior and interests.
One example is voice recognition technology used in contact centers that can help quickly identify returning customers (for customers that have opted-in to the use of voice recognition) vs. newcomers. This allows sales teams to take a different approach to customer service and helps stores gain a better grasp on retention rates.
Another example is in-store heat mapping, which uses a combination of cameras and computer vision to gain insight into how often specific products are picked up, which ones are typically returned, where customers go after returning a particular item, and how people flow through the store so that product placements adjustments can be made to improve that flow.
How can AI help facilitate retail sales?
Here are some of the ways AI in retail can help drive sales:
- It can create more enjoyable and personalized customer experiences with customized recommendations for customers based on their preferences and shopping history.
- It can support more effective inventory management to minimize out-of-stock items by quickly locating products in stock and alerting staff automatically when certain products are running low.
- It can help with price regulation and assess and analyze data around demand, season, competitor releases, and much more. This way, stores can optimize their prices, notify their customers about price changes, ensure they get good deals, and fill the store during specific periods.
- It can help take the load off busy sales reps by handling basic queries, providing customer service support in the form of chatbots and help stations as well as providing guidance regarding product placement in the store.
The future of AI in retail
AI also allows customers to better understand their own preferences and interests. For example, with AI-enhanced dressing rooms and mirrors, customers could choose to see what an outfit will look like and make suggestions on alternative products or colors based on prior customer preferences without trying on the clothing. The combination of reduced return rates for retailers and increased convenience for consumers is driving increased demand for the virtual dressing room market, which is expected to more than double by 2025.
Similar technology exists for other retail operations, such as AI-enhanced augmented reality, where customers can see how furniture options will look in their homes without having to leave the store.
As shoppers get more familiar with using technology in-store, demand for this technology will likely be a key feature of the future of AI in retail.
Learn more about how Verizon's 5G solutions can help retailers identify previous shopping behavior and customer interests to facilitate sales.
The author of this content is a paid contributor for Verizon.