Artificial Intelligence in Retail

Artificial Intelligence in Retail

AI in Retail: How new technology is shaping the future of the retail value chain

 

retail value chain

 

Artificial Intelligence [Machine Learning/Deep Learning] is the hot topic on everyone’s lips. If the many articles, rumours and instances of anecdotal hearsay are to be believed, AI is going to fundamentally alter practically every industry by staggeringly reducing costs and increasing efficiency dramatically.

A recent post by Sam Altman, the CEO of OpenAI, is well worth the read on this topic. He argues that AI is going to cause the creation of untold amounts of wealth in the US and will cause a fundamental re-shaping of the economic landscape.

This, we believe, is still a few decades off and, until then, there will be small but significant introductions of AI into certain key industries. Businesses that take advantage of these introductions are likely to prosper in a big way.

Artificial Intelligence in Retail

When it comes to retail, AI is poised for a huge impact. Indeed, it already has impacted the industry massively. Over the last three years, it has been suggested that AI has increased retail revenues in the US by $40 billion. Pocket change, if Sam Altman is to be believed. We believe EU and UK have a similar story, and hence our focus in this geographies to help build on such capabilities.

AI has already had some significant impacts on the shape and nature of the retail value chain. With the use of AI, retailers are using huge troves of data to make informed, statistically perfect business decisions and predictions. The effect of this has been the rise of highly efficient, seamless omnichannel sales strategies – a usually difficult feat can now be accomplished with relative ease, with the help of AI obviously.

 

 

omnichannel sales

 

The Good, The Mad, and The Scary : Amazing Uses of AI in Retail

Good:

Those who work in retail will be relieved to see that AI has some solutions for some of the biggest problems faced by those who live and breathe the retail value chain.

Inventory Management: 

By analyzing huge amounts of data from the marketplace, competitors and customer insights, AI business intelligence tools can give an insight into the most effective supply chain network and nodes within where inventory must be positioned for meeting the needs of the customer.

Demand Forecasting: 

Similar to Inventory Management, advanced algorithms can be used to predict demand and underlying patterns plus build in causal factors to generate accurate forecast of demand. This leads to effective deployment of purchasing dollars and decisions within the supply chain, supporting the various sources of demand implicit in omni-channel sales.

Mad:

Responsive R&D:

Artificial Intelligence will be able to interpret customer feedback and data to inform R&D departments on the next phase of products and services. AI will be able to sift through vast amounts of data and make connections and interpretations that are beyond human cognitive abilities to identify unmet needs of customers. Eventually it will be able to predict those unmet needs before the customer even knows they have them.

Guided Discovery:

As AI is predicting the customer’s unmet needs, it will also be able to guide the customer through the buying process in a way that is suggestive of their unmet needs.

Scary:

Emotional Response:

Eventually, using audio cues and facial reactions, AI will be able to predict the emotional state of the customer and adjust the buying process to match the needs of the customer at the time.

Interactive Chat:

AI chat bots can use machine learning to help converse with customers. Over time, this will not only cut costs but will also create a customer service experience that is far more personalised and relevant than ever before.

How to use AI to revolutionise your Supply Chain?

The benefits of having a data-backed, highly efficient supply chain are massive. Just take a look at Amazon, they have a world-class supply chain – second to none, and the benefits for them need not be explained. They are the benchmark for the entire industry.

Amazon take advantage of their ability to use AI and Machine Learning to predict demand to a high degree of accuracy – and then use its formidable supply chain to move goods just in time to meet this demand – thus providing same day delivery and other market beating capabilities that its competitors are just beginning to decipher.

Legacy supply chains are lagging behind the available technology. We have the technology to make supply chains incredibly efficient for both small & medium enterprises to large corporations.

AI will provide any business with the chance to optimise their supply, and retail value chains and, therefore, make the profitable conversion to omnichannel sales strategies. Flexibility, remarkable industry-defining insights, exciting experience for customers, captivating marketing for every prospect, and from anywhere in the world: these are just a few of the changes that will be brought about by the widespread adoption of AI in retail.

The future is bright, and for retail, that future is just around the corner.

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