The ongoing progress in artificial intelligence (AI) and machine learning, fuelled by the combination of cloud, big data and new algorithms will boost the retail industry, said research firm Frost & Sullivan. “As AI leverages big data to automate, predict and personalize, retail is testing and implementing these applications to garner robust competitive advantages,” said reserach firm.
The key focus for AI in retail is customer relationships. In times of concerns for the retail sector in the UK where sales posted biggest quarterly fall since 2010, the refashioning of this industry comes as a breath of fresh air with many opportunities to come, said Frost & Sullivan.
“Improving and refocusing the customer experience online and offline must be the guiding principle for all retail businesses,” says Frost & Sullivan’s Analyst. “Large tech-driven firms and retail tech startups are leading growth, particularly in e-commerce, and data network effects may mean that laggards never catch up. Older e-commerce and brick-and-mortar retailers must urgently adopt these technologies to regain their competitive footing.”
Retailers and tech industry players are investing in AI and creating opportunities that will disrupt incumbents.
Chat Bots and Virtual Assistants: These AI tools of direct customer engagement allow for a seamless experience when ordering products. Chat bots have question-answer and recommendation capabilities that make it a highly scalable yet personal sales channel.
Marketing and Segmentation: AI models can use data sets to predict and prioritize the most successful campaigns and channels, and provide these insights to decision makers.
Inventory and Supply Chain Optimization: In addition to increased accuracy and timeliness over traditional systems, AI tools can predict future supply-demand scenarios.
“In the AI age, data is digital gold and data inequality will prove a major battleground,” concludes the analyst. “Optimisation across all business functions will require an ever-growing pipeline of data collection that will demand new hardware, software and networking investments. The market must also pay attention to security requirements for AI and customer-analysis data collection.”