AI is on the shopping list for retailers

There is no shortage of reports saying artificial intelligence (AI) and machine learning will transform how we shop. Researchers atJuniper Research forecast retailers will pump $12 billion into AI by 2023, compared to $3.6 billion today. But, how will we get to this vision of AI powering retailers?

AI could help retailers be more competitive and to do so by cutting costs while increasing the quality of experience and engagement with customers. All kinds of processes will be affected including jobs – though AI will end dull jobs of little value to the customer or the employee.

Within physical stores, AI could remove what makes the experience mundane for example how smart checkouts use computer vision to enable “just walk out” purchasing and eliminate queuing.

Furthermore, taking away tills frees up staff from undertaking low value tasks for high value customer-facing activities like personal styling. These higher value activities can then be augmented by AI to benefit retailers further. For example, artificial intelligence can take a massive catalogue of products and filter them down into a manageable amount of recommendations, which the personal stylist can then present to the customer. The combination of human and artificial intelligence – people skills from human beings with data-driven insight provided by AI – provides a better customer experience than either one used alone, helping the retailer drive sales more effectively.

Online commerce is clearly where AI is having a huge effect already. For example, how machine learning sorts out product catalogues for online retailers. For decades, category managers and developers have been trying to create the perfect – high quality, relevant – product catalogue. With advances in machine learning, these day-to-day tasks could be automated.

There is a huge potential for intelligent algorithms to make sense of an increasing amount of data collected as part of digital commerce processes like search, fraud detection or churn prediction.

Demand forecasting is where AI will be playing a transformative role in the background. Understanding consumer demand patterns, predicting supply chain pressures and proactively making changes are highly complex tasks that need to be done in real time.