Being an integral part of the retail environment, doesn’t data analytics suffice in providing enough insights for the retailers to deliver better inventory management and in-store experience? It has been observed that more and more retail outlets are moving towards implementing Artificial Intelligence in their brick and mortar stores. But what is the need of AI when data analytics is already in place?
Let’s first understand what Data Analytics and Artificial Intelligence broadly refer to. In Data Analytics, data at hand is analyzed to draw conclusions and influence decision-making. While in AI, computer programs and systems are created that replicate the aspects of human thought-process and intelligence, thus building a system that is smart enough to take its decision as a human would.
The matter of the fact is that even though data analytics may suffice when it comes to keeping a check on wastage, merchandising products, and offering better customer experience, among others, for small and medium sized retailers, AI can help predict the upcoming trends and envision a predictive plan for the future, regardless of the size of the company. AI, in collaboration with the Internet of Things, is all set to help the retail industry take advantage of digitization to provide targeted, just-in-time products and services, in a more operational manner. The Economic Times thinks AI-aided virtual assistants would be the future of retail industry.
AI in Retail
Artificial Intelligence has come up to the rescue of the retailers who want to provide exceptional customer service and bank upon the range of possibilities. AI helps retailers analyze customer data and change how interactions happen with the shoppers. Furthermore, AI is helpful in predicting demands of products so the stores can manage inventory efficiently and have the in-demand supplies available at all times.
As per a report published by market research firm Tractica, the retail industry is the third largest end market for the application of AI technology. No wonder the retailers are making significant investment in the field. But even then, the adaptation has not seen the heights it should have already touched. A specialist publication “Retail Week” and retail tech firm “Qubit” jointly came out with a survey of UK retailers in 2017 that revealed that around 38% of the businesses that appeared for the survey were already implementing AI, while 48% were using machine learning. Furthermore, around 50% of the retailers were using AI to anticipate demands and drive sales, while around 46% used it to understand customer behaviour better and offer customized services.
Machine learning has enabled retailers to automate decisions via various algorithms so that decisions can be taken based on past occurrences and future predictions, without the requirement of any manual input. Retailers are using AI effectively to analyze their customer behaviour, and use the customer data to provide personalized shopping experience to the customers.
IoT in Retail
IoT in retail is the network of connected devices that work together to lessen the burden in retail environments and help retailers digitize their brick and mortar stores to be more efficient. Connected devices help make operations more efficient because of their ability to track inventory in real-time and increase engagement through devices such as interactive smart mirrors, thus offering better store journey to the customers.
The biggest advantage of using IoT in the retail industry is that logistics and supply chain become easy to manage. With smart shelves and RFID tags, inventory is being tracked real-time and something going out of stock is nearly out of question. Retailers have a better idea of what is happening on the sales floor. Interactive kiosks, tablets for sales personnel, digital signage, mobile POS, etc. have all added to the competence of a retail outlet, thus amounting to enhanced in-store experience for the buyers.
There are more possibilities IoT could offer that are still left to explore. Some companies are coming up with innovative solutions for using IoT in retail stores. Self-checkout counters and virtual shelves have already seen their ways to many stores on an experimental basis and retailers plan to make the most use of such facilities to enhance shopping experience and their own capabilities.
4 Fields That Would Improve With the Collective Use of AI and IoT
Store Inventory Management
Inventory can be tracked real-time and possibilities of items going out of stock would be less. Predictive analysis will help retailers stock up products that are in demand by the shoppers, and reduce the quantity of unwanted products from the stores. Data insights will help improve inventory planning, tracking, stocking, and forecasting requirements.
Supply and Logistics
IoT-driven technologies, with the aid of data supplied by AI, can help automate and thus optimize the entire logistics and supply chain. An ideal supply chain management system will automatically order items when they reach a pre-set lower limit. It will effectively manage the demand surge due to unexpected events.
Personalized Shopping Experience
Data collected by the use of AI and with the help of IoT can help retailers with customizing ad promotions, providing product recommendations, crafting digital signage content, and so on. Apart from just making customized recommendations in order to provide a personalized approach to every shopper, AI can also be used to operate chatbots that mimic the interaction between the sales associates and the customers. The technology can also sense the tone of the customers and decide on the best way to respond to their comments, queries, and complaints.
An ideal retail environment can’t be built without the prices being optimal. Data collected from the AI systems and the connected network of devices may help decide on the pricing as to when reduce the prices of commodities and when to increase them depending upon the demand and availability.
AI and IoT are the emerging technologies that have been embraced by a number of retail giants across the globe. Amazon and Walmart have already started making use of them in their retail outlets and the results are there for the world to see. Amazon is coming up with a new technology for its grocery stores that will use AI to provide a checkout-free experience to the shoppers, while Walmart is working on introducing a smart shopping cart that helps buyers navigate around the stores and select what they want to buy from the smart shelves. It is now a necessity to employ the benefits of AI and IoT, else competition is fierce and there are enough chances you will fall behind.
At Instor, we are dedicated to providing a rich in-store shopping experience to the buyers with our customized Display, Storage, and Movement solutions for the retail industry that are driven by AI and IoT technologies to make you stand out in the competition.