Artificial Intelligence for Retail and Marketing in 2019

Introduction

For decades traditional analytics have worked perfectly fine for the data-driven retail industry. However now, Artificial Intelligence (AI) and Machine Learning (ML) introduce an entirely new level of data processing which leads to deeper business insights. Data scientists could open a new world of possibilities to business owners extracting anomalies and correlations from hundreds of Artificial Intelligence/Machine Learning models.

AI in Retail: Statistics

CB Insights reports that in the period from 2013 to 2018 Artificial Intelligence startups raised $1.8 billion in 374 deals. Amazon can take credits for these impressive numbers because they made business leaders change their minds about Artificial Intelligence in the retail market – both physical and e-commerce strategies to stay ahead of the competition. At the moment over 28% of retailers are already deploying Artificial Intelligence/Machine Learning solutions, which is a sevenfold increase from 2016 where the number was only 4%.

The stores become cashier-free

The robotization of stores will result in reducing lines, lowering the number of human employees and will significantly save operational expenses. Amazon AI has already introduced checkout-free stores. The Amazon Go and Just Walk Out Shopping technology react if you took 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.

Chatbots to assist Customer Service

AI chatbots provide an even higher level of customer service, improve searching, send notifications about new collections and suggest similar products. If a customer already bought a black hoodie, a chatbot can suggest a snapback to match, and the look is complete. 80% of brands worldwide are already using or going to use chatbots in the near future. Tommy Hilfiger and Burberry have launched chatbots to help their customers navigate through their collections.

In-store Assistance

Retailers also invest in technologies that help customers in the shopping process and also help staff in stores. Kroger Edge technology eliminates paper price tags in their stores, introducing smart shelf tags. It also provides video ads, nutritional info, and promotions on the displays. Lowebot, the autonomous in-store robot from Lowe, help customers to find what they need in the store in different languages. At the same time, it helps with inventory management thanks to real-time monitoring capabilities.

AI & ML solutions in the retail store

Price Adjustment

Applications of AI for retail stores could help businesses to set prices for their products, visualizing 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. Business leaders 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 the ability to adjust prices and promotions according to obtained information.

Supply Chain Management and Logistics

Poor execution in this area leads to losses for retailers around the world in about $1.1 trillion every year. Leftovers and out-of-stock scenarios can be eliminated. AI in the retail supply chain can be used for restocking—calculating the demand for a particular product taking into account a history of sales, location, weather, trends, promotions, and other parameters. Morrisons has made a better situation with stock forecasting and replenishment in 491 stores with the help BlueYonder. It resulted in an up to 30% reduction of in-store shelf gaps.

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