Have you ever sat in a meeting and heard the question, “How can AI help us make more money?”. The answer is most likely yes, considering how AI has ballooned recently.
The value and functionality of AI vary significantly across different industries. For example, AI applications in architecture differ greatly from those in marketing. One industry experiencing rapid growth is retail AI. According to Google Trends, searches for “retail AI” have steadily increased monthly for the past year, indicating rising interest and investment in this area.
Since the launch of ChatGPT in 2022, AI has rapidly become an integral part of daily work life for everyone, regardless of their industry, seniority level, or role. According to ClickUp, there are currently 180.5 million people registered on ChatGPT alone.
Considering that “retail AI” is a growing interest on Google, it’s crucial not to miss any potential opportunities to implement it in your business. Various companies are already experimenting with retail AI in several ways. We’ve summarized some of these innovative approaches below to help you stay ahead of the curve.
Innovative retail AI examples in the industry
The best way to get inspired and envision how AI could work in your business is to observe industry trends and understand what others are doing. For example, Amazon has released AI-powered smart shopping carts, which are now available for third parties to purchase and turn into a service. Watching such innovations can help you identify opportunities to implement similar AI solutions in your operations.
Here are the top five latest AI products in the retail industry:
- HyperFinity AI-Powered Pricing: HyperFinity has developed an AI-powered pricing solution that optimizes pricing strategies based on various factors, helping retailers increase revenue and competitiveness.
- Target’s Store Companion: Target introduced an AI tool called Store Companion to assist employees with store operations, answer questions, and enhance customer service.
- Walmart’s AI Produce Scanner: Walmart uses AI to scan produce for ripeness, providing data-driven insights to improve inventory management and reduce waste.
- Best Buy’s AI Assistant: Best Buy developed a generative AI assistant to help employees efficiently access company resources and product guides.
- Amazon’s Smart Shopping Carts: Amazon is utilizing AI-powered smart shopping carts in new stores to streamline the shopping experience and eliminate traditional checkouts. They recently started selling their Dash Carts to third parties, further increasing the power of their AI implementation.
Any of the above Retail AI initiatives could provide value to a retail business and would be worth investigating. Exploring and implementing such technologies could significantly improve sales performance, especially during high-demand periods like Q4.
Amazon’s dash shopping carts are an especially good opportunity because you do not need to do any of the expensive tech work yourself, and they are therefore quickly implementable once purchased.
Source: Aboutamazon.com
Five actionable retail AI strategies to implement today
AI in retail can take many forms and applications. Sometimes, it’s fully customized and coded from scratch; in other forms, its application is simply how you implement existing AI. For example, implementing AI in your business might just be harnessing a free-for-use AI tool in your everyday role.
Here is a summary of five things you can implement in your day-to-day retail role:
1. Personalized Customer Recommendations: AI can analyze customer data to offer personalized product recommendations, increasing the likelihood of purchases. This sounds overwhelming but can be as simple as uploading a customer purchase list over specific months into ChatGPT and asking it to analyze things like what age group buys the most of which product, what months or weeks you sell the most of one product, which regions certain products sell the most in. ChatGPT can read large amounts of data and summarize it quickly for you into informative and easy-to-read patterns.
Sales increase: Tailoring product suggestions to individual preferences can increase the likelihood of purchases by showcasing more relevant and appealing items to each customer.
2. Demand Forecasting: AI algorithms can analyze historical sales data, market trends, and external factors (weather or holidays) to predict future demand accurately. This ensures optimal stock levels, preventing both overstock and stockouts. Again, this can be done by uploading historical sales data to a free-to-use application such as ChatGPT.
Sales increase: Accurately predicting customer demand ensures optimal stock levels, preventing lost sales due to stockouts and reducing excess inventory costs.
3. Enhanced Customer Service: AI-powered chatbots and virtual assistants can provide instant customer support, improving the shopping experience. Many low-cost monthly subscription platforms offer AI-powered chatbots that can be added to your website. They require an initial setup where you feed the chatbot with questions and answers, after which it learns from customer questions. This article by Botpress.com walks you through 5 types of AI chatbots and provides links to chatbot builders.
Sales increase: AI-powered chatbots and virtual assistants provide instant support, resolving issues quickly and improving the shopping experience, which can lead to higher customer satisfaction and repeat sales.
4. Targeted Marketing Campaigns: AI can segment customers and tailor marketing campaigns to specific audiences, boosting engagement and conversion rates. A Personalized approach is always the most successful one. If you get the right product with the right message in front of the right customer, the likelihood of them purchasing is higher. Using AI to segment customers and write content per segment is a good way to start the AI process in marketing.
Sales increase: AI segments customers and delivers tailored marketing messages, increasing engagement and conversion rates by addressing specific interests and needs.
5. Dynamic Content and AI: Dynamic content and AI are revolutionizing digital marketing by delivering personalized experiences. An example of this is using dynamic capabilities in digital catalogs to remove any need for manual work. By integrating your product feed, dynamically pull accurate product details into your product catalogs. Include things like title, image, and price via the integration. This product feed integration displays accurate and up-to-date information, enhancing customer experience and streamlining your catalog management. Stay competitive by showcasing your products effectively with real-time updates.
Sales increase: Keep prices up-to-date through product feed connections, replace out-of-stock products seamlessly, and open the door to personalization, enhancing customer experience and driving sales with real-time, accurate product information.
Source: Medium.com
The above five strategies are all possible to implement before Q4 and have the power, if implemented correctly, to increase sales.
AI is revolutionizing the retail industry by enhancing various operations and improving sales performance. From dynamic pricing and personalized recommendations to demand forecasting and targeted marketing campaigns, AI enables retailers to optimize stock levels, tailor customer interactions, and create efficient, engaging shopping experiences.
Embracing these AI-driven strategies can significantly boost sales, especially during high-demand periods like Q4, by ensuring the right products reach the right customers at the right time. Exploring and implementing these technologies can provide a competitive edge and drive business growth.
