With data and algorithms, companies in the sector can put themselves in the shoes of their consumers and always manage to offer them the products and/or services that best suit each profile. Also, with the development of production processes, investments are made to improve products and offer greater variety. In this way, consumers benefit from more refined and select products.
AI makes it possible for companies to be more adaptable to each of their consumers, a personalization that is so crucial in today’s customer demands.
How Artificial Intelligence is reshaping retailing
In recent years, data science has experienced a boom thanks to the number of insights it provides, not only about customers but also about the processes themselves. Its use is not only about automating tasks or reducing costs through process efficiency.
The more traditional retail companies are undergoing a process of accelerating their digital transformation, as it has become the cornerstone on which the rest of the company’s operations are based.
There are many benefits of AI and its functionality as a catalyst and enabler of business activity. For example, if we talk about generating good margins. With the proper application, the profit multiplier can be exponential since the combination at different points can reduce costs and increase the company’s sales and production.
Benefits of Artificial Intelligence in the Retail industry
AI can benefit the entire retail value chain, from materials procurement, processing, point of sale, and end-user purchase.
Some of the essential benefits of introducing artificial intelligence in the retail sector include:
Purchase prediction — It can be extrapolated to both consumers and companies when it comes to purchasing materials for the production of products.
Leveraging digital channels to help customers on their journey — Whether to recommend the products that best suit your needs, answer questions, help solve problems, or provide personalized assistance.
Analysis of user purchase behavior — Information is obtained from different stores (physical or digital) to understand better how to position certain products or improve current ones.
A better understanding of customer and product lifetimes — Provides the opportunity to undertake different marketing initiatives to improve the perception of products or actions to incentivize the user based on their behavior.
Personalization and better positioning of products — Meeting customers’ needs by analyzing consumption habits and recommending the best option based on responsible use of AI.
Fraud prevention — By analyzing user purchases, making it more difficult to prevent fraud.
Examples of Artificial Intelligence in Retail
AI applications for the retail sector can be applied to all types of customers, from significant shopping malls, fashion, and textile e-commerce to large and small supermarket chains, among many others.
Smoother communication
One of the most widespread applications is improving the communication channel with customers during and after the purchase. In this way, information is made available efficiently and enhances customer service and difficulties. In this way, incident resolution time is shortened, and customer satisfaction is increased.
In fact, this use case benefits the customers and the staff themselves, as it can be used to classify incidents better and even suggest to the agents a possible satisfactory solution so that the expertise is shared among the staff.
Stock forecasting
Other applications applied to the retail sector are material provisioning and sales forecasting. Thanks to AI, retailers can make a better estimate of their product stock, ensuring that there is no excess or shortage of products physically in the store.
They are also looking at optimizing their operations, both to bring the product closer to the end customer and when making or buying the materials to make their products. This is reflected in improved resource efficiency, making their operation more sustainable, and improving cost-saving parts of their value chain.
Product personalization
Retailers that have recently entered the market emphasize personalization and digital marketing strategies. They manage to involve the customer both in offers and in the process of understanding what their needs are.
The goal is always to offer them the best variety of products, improve brand perception, and increase profit per purchase.
