According to the latest report, AI in retail is expected to witness a growth in spending of over 200% between 2019 and 2023. The projections reveal that it will be $12 billion in spending by 2023.
Currently, the retail industry spends close to $49 million. This spending is distributed among marketing, sales, finance and customer service departments.
By 2023, a significant volume of global spending in retail would be focused on back-office operations, warehouse automation, and analytics. In fact, it’s the use of AI for analytics and demand forecasting that is attracting global retail firms to deploy AI across their major operations.
In this article, we reveal the five benefits of adopting AI in retail.
Effective Supply Chain Planning using Intelligent Automation (IA)
In the future, retailers can make and save billions of dollars by adopting Automation, Robotics, AI, and Drone services. According to Capgemini, retailers can save as much as $300 billion in the future by scaling AI deployments across the entire value chain.
Recently, IBM’s made a big announcement about the growing importance of AI in retail. Showcasing this as a watershed moment for retail marketers, IBM revealed that 85% of retail and 79% of CPG companies plan to transform their Supply Chain using IA. By leveraging IA, retailers and CPG companies expect to grow their revenues by 10% or more in the next 2-3 years.
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Accurate Demand Forecasting to Drive Higher Margins
AI and Machine learning will drive greater margins for AI-equipped retailers by enabling them to meet customer demands quickly. According to the report, machine learning-based demand forecasting would fetch revenues of up to $3 billion by 2023. Currently, AI-driven retailers are spending $760 million on these operations.
Real-time Customer Intelligence and Customer Experience
Using AI for retail, businesses can build highly accurate Customer Intelligence to deliver relevant personalization, service and customer service. For example, new AI-powered retail technologies such as the IBM Order Management (OMS) can improve omnichannel profitability and customer experience by increasing purchase conversions. Without AI, these purchase conversions were lost to seasonal fluctuations, inventory mismanagement and inadequate analytics on consumer’s buying behavior.
Research author Nick Maynard explained, “With the rise of collect-in-store and one-off events such as Black Friday, understanding demand and supply chains is more crucial than ever with AI playing the central role”.
New Face and Voice for your Marketing, Sales and Promotion Campaigns
With the advent of data-driven Marketing, Sales and Media technologies, marketers and sales teams are already speaking the AI vocabulary with their customers. For retailers, this AI race is expected to be no different.
Retailers can unearth an enormous level of efficiencies in their operations by leveraging AI in their operations. Some of these technologies already available to Marketing, Sales and Customer Support teams are: Face recognition, Voice and Speech, AI-driven Content Discovery, Marketing and Sales Automation, and Virtual Assistants and Chatbots.
By simply adopting AI in customer relations and sales operations, retailers can expect to reduce customer complaints by 15%. Fewer complaints automatically translate to brand loyalty, higher retention, and reputation.
Zero Queues and Waiting Period: Arrival of Smart Checkout Technologies
Next-gen retailing is gaining momentum from all the interesting innovations coming to light in the fields of AI, Embedded/Quantum Computing, Computer Vision, NLP, and Deep Learning. Leading players such as NVIDIA, Qualcomm, and Tencent are equipping retailers with powerful AI technologies to accelerate adoption of voice, camera, and Wi-Fi enabled shopping. This would lead to the era of “Connected Shopping”—a seamless experience that helps shoppers to avoid long waits and the checkout points. By reducing the waiting time, AI-equipped retailers can earn an annual turnover of $1.4 billion by 2023.
In the days and months to come, AI-enabled retailers would be able to deliver a cashless experience to all shoppers, tailored to their taste, sentiments and culture.
With billions of dollars involved in the AI-enabled retail industry, the roadmap to the future is clearly going to be a challenging task for Marketing, Sales, and Customer Support professionals.