Artificial intelligence: The ‘X’ factor changing retail
Traditionally, the customer-retailer relationship was simple – retailers that provided the best deals via coupons and offers often won over the customer. But this was fifty years ago. Technology has made a quick and steady progress that has disrupted many industries and pushed them to either sink or swim. Retail is no stranger to this and has forced big brick-and-mortar stores like Walmart, Lowe, and Target to up their game or face extinction at the hands of players like Amazon.
Amazon, who started by just selling books online, is constantly innovating through technological research and development and setting new standards in retail every day. They’ve come to understand that while price and quality matters, it’s customer experience that really seals the deal and ensures repeat purchases and loyal customers. By leveraging artificial intelligence, they have been able to provide customization while browsing for products to include the best deals, similar products, easy purchase and more. They have built an empire on just this and have become a force to be reckoned with for the others. In fact, Netscribes’s recent analysis shows that Amazon is one of the top assignees for AI patents.
Retailers and brands are now catching up with disruptors such as Amazon by investing more in technologies like artificial intelligence to differentiate themselves. According to a recent study, 45% of retailers plan to adopt artificial intelligence by 2020 to enhance their customer experience. Amazon is in the trial phases of implementing its Amazon Go app which eliminates time spent at the check-out queue. The app uses sensors to detect products that the customer has added to their basket while in the retail outlet and charges it to their Amazon account. Starbucks’ My Barista app lets the customer talk to a virtual Siri-like barista to place their order and have it ready for pick-up in a nearby store thus eliminating time spent waiting for the order preparation and billing. Lowe’s Lowebots uses natural language processing which helps answer customers’ in-store queries, detects idle customers and engages with them for any assistance needed.
Apart from retailers, there are independent providers of AI that are further upping the retail game by bringing to the table the best of technological innovation. Brands like a Sephora and L’Oreal use Modiface’s facial modelling technology to help their customers explore and discover products tailored to them. Amazon’s very own machine learning platform provides them with the ability to predict and find patterns using data thereby delivering on customer experience every time. IBM’s cognitive system Watson analyzes structured and unstructured data to derive meaningful insights.
Through the plain observation of these examples, it’s clear that engaging the customer and providing a better experience are the top priorities for retailers and brands. In the past, customers’ preferences would play a major role in driving innovation. Today, however, customers flock to the brands or retailers offering the latest innovation and superior customer satisfaction. In this, the application of artificial intelligence has been the major game changer.
Learn more about the latest technological developments in retail in our whitepaper Artificial Intelligence in Retail: Patent Analysis.
