Artificial intelligence is revolutionizing how retailers operate- and for the better. Artificial intelligence allows stores to make better decisions, boost sales, and ultimately retain customers.
FREMONT, CA: Profitability is the most important factor when operating a retail establishment. And before retailers can achieve profitability, they must master productive and efficient operations. They now have the ultimate advantage to boost their store's bottom line: artificial intelligence (AI) is on their side.
According to research, the global retail artificial intelligence market is expected to grow from under $5 billion to over $31 billion by 2028. Therefore, if retailers have yet to jump on the AI bandwagon, they may soon be left in the dust by this industry's digital revolution and transformation.
How precisely is AI transforming the retail sector? Here are everything retailers need to know about artificial intelligence's impact on the retail industry in 2022 and beyond.
Automating previously human-intensive tasks is the most effective way AI is transforming retail. This enables employees to devote less time to mundane tasks and more time to solving complex customer issues. And this can immediately enhance the customer experience, leading to increased sales and profitability.
AI has also become an essential component of loss prevention, particularly in self-checkout technologies. For instance, AI is integrated into self-checkout stations' scanning and video systems to gain insight into how theft occurs. The AI is designed to flag suspicious transactions and even alert staff to potential shoplifting occurring in real-time.
However, a reputable retail security system safeguards its assets without violating customers' privacy. Instead of logging data on suspected shoplifters without the customer's consent, authentication only logs the data of authorized personnel who have opted into the system. Thus, retailers can protect the privacy of their customers while maximizing the security of their retail stores and minimizing financial losses.
Market Demand Forecast
With AI, retailers can also more easily anticipate future customer and market demands, allowing them to meet their customers' needs better. For instance, AI can assist in analyzing past consumer behavior patterns and predicting future actions. They can also determine which areas of their physical store attract longer customer attention.
If retailers operate an online business instead of a physical store, AI can provide information about their website's visitor count and user demographics. They can then use this information to make informed marketing decisions. For instance, the information they collect can help them tailor their next advertising campaign to their customer's interests and requirements.
Supply Chain Management
AI can also assist retailers in optimizing their store's supply chain. This technology can, for instance, analyze past customers' purchasing habits and alert them immediately when certain products run out. This is crucial because if customers need more confidence that retailers always have the products they require, they may patronize a competitor. And lost sales have a negative impact on their bottom line.
AI can also predict when certain products will be in higher demand during the year. This allows retailers to begin stocking up in advance rather than scrambling to acquire and display these seasonal bestsellers when customers inquire about them.