Here are 10 stunning applications of AI in retail that you might not be aware of. The retail sector is under heavy pressure due to increasing customer demands and cutthroat competition. To face such heavy demands, AI can lend a helping hand to retailers. Major retailers like Lowes, Target, Amazon are increasing their AI spend to improve their customer experience, bring in more sales, profitability, process efficiency and cost savings.
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Top 10 applications of AI in retail
1. Better product recommendations
Be it online or offline retail, product recommendations drive the majority of the sales. AI algorithms look into the past purchase history of users and predict a set of products that the customer is most likely to buy. Collaborative filtering and other similarity algorithms such as cosine similarity power most online recommendation engines today. Much more enhancements related to product recommendations are being infused into retail using AI to boost sales.
2. Improved customer service
Retailers have learnt that better customers service levels have high correlation with sales numbers. Attempts are being made to augment human sales representatives in offline stores with robots that can answer your questions intelligently.
3. Data Analytics
AI is redefining the way we look at and make inferences from customer data. With user behavioral data, you can make better decisions on offering a personalized shopping experience to customers.
4. Better marketing
AI can help improve the conversion rates of marketing campaigns by targeting customers better. With AI, you can predict which set of ads will perform better for a given category of customers persona.
5. Virtual Reality
Virtual reality and AI go hand in hand to help customers experience products right from the comfort of their homes. It started with the eyeglasses industry where users could try a pair of spectacles online without even touching them. Today AI is helping improve the VR capabilities to trying dresses and experiencing products online.
6. Product Search
Search is the number one channel that converts in retailers. People want to know if there is a product and where it is available. Bots are today capable of understanding user questions and helping them to located the product using advanced AI techniques.
Determing the price of a product that maximizes revenue for an online retailer is a complex task when done by humans. AI has taken over humans in this department. Today algorithms decide price of 1000s of product prices at SKU level taking into consideration thousands of internal, external and market factors.
8. Fraud Prevention
Companies like paypal use AI to detect and prevent online fraud in payments. When the transaction volumes go up, AI does a better job at preventing fraud as compared to traditional methods.
9. Complete shopping automation
Are you familiar with long queues at check out places. This might soon become a thing of the past as AI is being adopted more into retail. Intelligent sensors could soon track items that are in a customer's basket and charge you accordingly thereby reducing waiting times inside a retail store.
Soon the delivery boy delivering your groceries could be replaced with drones or robots enhanced with GPS tracking and customer face recognition capabilities. This could mean reduced delivery times and a ton of cost savings for retailers.
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