According to a recent study by IBM, 85% of the global retail industry will be leveraging artificial intelligence within the next three years. They believe that with the right intelligent automation capabilities, they’ll increase annual revenue growth by 10%. “Working with the right partners and third-party experts can result in acceleration of digital services, capabilities and customer experience and business efficiency for retailers of all sizes”, says Luq Niazi, IBM Consumer Industries Global Managing Director. But, which AI trends will give retailers the biggest boost? It comes down to these six key areas.
1) Supply Chain Planning and Demand Forecasting
We live in an omni-channel world. Customers want a seamless experience, from their PC to their phone and through the brick-and-mortar shop. The trouble is, many retailers are still relying on a human eye and hands to calculate where inventory needs to be at any given time. With the use of machine learning, supply chain planning comes down to algorithms and intelligent tech which can identify new patterns and adapt, so inventory is always exactly where it needs to be as its required.
2) Customer Intelligence
Solid customer intelligence is the building block in strong relationships. By analysing customer habits, from the actual purchases down to the time an individual spends looking at an item, it becomes easier to identify what that person will be interested in now and on subsequent visits. While this concept may be nothing new, the latest AI digs deeper into the data to find unique trends in buyer behaviour. Are people who purchase throw pillows more likely to purchase lamps? Can those browsing fine wines be enticed to pick up a bouquet of blooms too? Is the person exploring prams more likely to pick up earplugs or a handmade blanket? Perhaps it varies based upon the type of pram. Either way, AI knows, and by placing whatever it is that your customers want at their fingertips, you make their lives easier. Thus, a loyal customer is created.
3) Marketing and Sales
Leveraging customer intelligence to enhance the customer experience naturally falls in line with sales and marketing benefits, but the use of AI goes much deeper than this. Under the old standard model, which some of you are probably still using now, things like e-mail campaigns are still being plotted out by a marketing manager, and the whole process can take a week or more. Did someone buy within the last month? Ok, they get a sale email inviting them back. The message is drafted, audience selected, and everyone who made a purchase gets their 20% off code. That’s not a bad way to keep customers warm, but what if your wine buyer was invited to sample a new product or was offered a BOGO deal? What if your pillow buyer was given a selection of items which coordinate with the pillows he or she purchased? What if, with the use of AI, you knew exactly what message to send, when to send it, and could craft a campaign in a quarter of the time? You actually can, and it not only increases email open rates, but boosts conversions and loyalty too.
4) Store Operations
At Popertee, we can tell you where the best location for your shop is based upon the audience you need to reach. This kind of tech takes the guesswork and much of the risk out of selecting a location. Some enterprising companies are taking this a step further, and grabbing data from apps on customer phones, then reporting it back to store associates when someone visits. No doubt, it can seem a but unsettling at first, but consider you’re going into a shop to purchase something very specific, such as a new computer, and you’ve been browsing a specific brand of computers online. The shop sends over an associate who understands the tech and can walk you through which computer is best for your needs. Chances are, you’ll leave quite happy after having your needs met so well. As a shop owner, you’d also be glad the visit went well and that your resident PC expert took over instead of the one who knows acoustics.
At Shoptalk 2019, the world’s biggest retail and ecommerce conference, Dave Kimbell of ULTA Beauty noted that “There’s nothing more connected than when one of our …associates spends up to two hours with a guest, customizing a solution to meet their needs”. Two hours per customer is very specific to a beauty brand, but customers appreciate a personal touch and tailored experience. “Customers don’t fall in love with a business model; they fall in love with a product or service that makes them feel something.”
Have you ever placed something in your Amazon shopping cart and left it there for a period of time? Chances are, you came back to a note saying that the price shifted. Why does this happen? Dynamic pricing. Many retailers use AI to create pricing schemes. They may set a minimum price threshold, perhaps even based upon their own costs, and then have their program run cost comparisons in the background. Whether you want the lowest price, the highest price, or something in the middle, your pre-established rules will ensure you’re always setting your desired precedent. One common method is to undercut competitors for the primary items people shop for, then charge just a bit more for the things people usually add on. Ultimately, the low item wins the sale and the add-ons keep revenue balanced.