Just a decade ago, the term Artificial Intelligence (AI) sounded like something out of a Hollywood sci-fi blockbuster. In recent years we’ve seen much hype around AI, with applications disrupting all industries as we know them, including retail. But are retailers making the most of the technology’s potential? Geoff Hueter, CTO at Certona, looks at how AI is changing the face of retail and the benefits it is bringing to brands who are embracing it.
The retail sector is in a state revolutionary change. New technologies continue to reshape the industry as retailers look to keep up with the demands of today’s attention-poor, fickle, channel-hopping shopper. But perhaps the ultimate game-changer amidst the sea of new technologies is AI.
The tech du jour in many industries, AI has taken the world by storm, partly as a result of the advent of consumer applications like Amazon’s Alexa and Apple’s Siri. But AI isn’t just asking Alexa to add groceries to your shopping list or speaking to Siri for direction; it’s also enabling cutting-edge retailers to personalise the shopping experience. However, AI remains largely underutilised in the retail industry; it is gaining momentum as a differentiator for long-term success.
Overcoming the hype
Tech giants like Apple, Facebook and Tesla are all investing in AI, and in the last two years alone we’ve seen the excitement and widespread press coverage of ground-breaking innovations and advancements: from Google’s GO champion AlphaGo, to machines that can recognise faces with more accuracy than a human, to self-driving cars. The hype has reached a peak, but the buzz has also caused much confusion around the benefits and limitations of the technology and in particular its applicability in retail. As such, many retailers have been wary of implementing AI solutions into their business operations.
AI has the power to change the face of retail as we know it, opening the door to further opportunities for retailers provided they can distinguish the fact from the fiction. Gartner predicts that by 2020 85% of customer interactions will be managed by AI, leaving less than three years for brands to embrace AI and iron out any challenges associated with the technology.
Bridging the data gap
So how exactly can the technology assist retail? AI in the retail space is somewhat more subtle than the image created by films like the Terminator or Ex Machina, or recent TV series Humans and Black Mirror.
Today’s shoppers expect a connected and personalised experience across the entire omnichannel landscape. Whether it’s browsing products online or via mobile, calling a customer service centre or picking up a product in store, the personalised delivery of these experiences has become imperative for retailers. But for many businesses creating this seamless experience is still a challenge.
Retailers have masses of both personal and behavioural data at their fingertips with shoppers signing in, communicating or engaging with multiple platforms. The current struggle is harnessing this data in real time and at an individual level. Many lack the IT infrastructure and digital skills to analyse with immediacy across multiple platforms. As a result, retailers are often operating with a fragmented view of their shoppers, with isolated data silos that can’t talk to one another. Missing an opportunity, they are unable to go beyond offering simple product recommendations and cannot provide in-the-moment targeting and personalisation.
This is where AI takes centre stage. The technology is key to overcoming the data conundrum many retailers face to deliver on shopper expectations. AI and machine learning bridge the gap between these systems and provides the tools to analyse large data sets and produce meaningful and fast insights.
Perfecting personalisation and more
AI can be used to provide true personalisation. Like the perfect store assistant, an intelligent AI system can learn from its environment, recommending items based on a shopper’s in-the-moment needs and previous purchases or interactions. But unlike a salesperson, AI is not limited to the capacity of a human brain. It can replicate the traditional skills of an in-store assistant but at scale, whilst taking into account the entire product line, current stock levels, margin and current trends in that area. Most importantly all of this is performed and processed in real time – the lynchpin to real personalisation. Through AI, retailers can quickly access data points to render a robust profile for each individual shopper, allowing them to deliver the most relevant experience in real-time to a segment of one.
Artificial intelligence is no longer the material of science fiction movies, and it’s primed and ready to rewrite the retail playbook as we know it.
By Geoff Hueter