AI and the Digitization of the Retail Industry
Many new realms and opportunities have been created for retailers on a global level since the beginning of the digitization of the retail industry. In recent decades, shopping for merchandise has evolved so drastically and has gone far beyond the roots of simply bartering currency in exchange for a product. Between the demand for seamless integrations and customer experiences, it is predicted that by the end of 2018, Artificial Intelligence will be utilized by 75% of developer teams in building services and business applications that revolve around eCommerce.
Artificial Intelligence has certainly made a mark in the eCommerce arena in recent years. It is estimated that by 2020, nearly 80% of customer interactions will be handled by Artificial Intelligence. This is especially in the case of chatbots, which have been a tremendous boom after getting their start from messaging apps. Presently, 3 out of 4 online retailers in the fashion industry are making plans to invest in AI in the coming year, knowing very well it will assist them in enhancing the efficiency of their organization.
There are numerous factors that are driving the interest towards Artificial Intelligence as it continues to transform eCommerce, particularly in the retail industry:
- Personalized Experience: AI offers a unique way of delivering a personalized experience to users worldwide, practically serving as a digital shopping assistant. AI can also help online retailers add unique functionalities to their website, such as a visual search camera alongside their textual search bar, or personalized pages/recommendations for each user. Not only does this make the online shopping experience more interactive, but it also generated more sales and helps with customer retention.
- Data Analysis: AI software has simplified data analysis, which comes in particularly handy when it comes to the management of customer data. By analyzing purchase patterns, the behavior of visitors, and various data manipulation tasks, it makes it easier to make smarter decisions in terms of product offerings, and UX/UI.
- Customer Service: It’s no surprise that these days, customers not only shop from brands that offer the right products for the right price- they also gravitate towards the brands that offer the best customer service. Luckily, AI helps assist with that as well. While there are many inquiries that require the assistance of a real-life human associate, it’s safe to say that most inquiries, such as basic troubleshooting, shipping info, and account info, can be handled by AI. It’s easier on staff members as they can focus on the more intense inquiries, and it is also budget-friendly for brands as AI works round-the-clock, and offers instant answers to consumers over their basic inquiries. Conversational chatbots are strategically being used by many enterprise companies worldwide.
- Going the Extra Mile: Data obviously plays a crucial role for businesses, especially in eCommerce which is rich with it. AI is exceptional in tracking and collecting every bit of customer data as it ties with their order history, predictive analytics, and purchase frequency to help identify purchase patterns. This will help identify what customers might want to order next, which could help retailers decide if they would like to send out a notification or email to increase the chance of generating additional sales.
All in all, it’s safe to say that Artificial Intelligence goes far beyond providing ease in shopping for consumers. It also helps brands with customer service, and can act as a new revenue stream. Before getting on board, it’s essential for companies to go over what their requirements are, and begin a PoC of AI solutions to determine whether the needs can be met with satisfaction after initial testing.