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Can retailers benefit from the artificial intelligence revolution?

Can retailers benefit from the artificial intelligence revolution?

Artificial intelligence is no longer only a subject for science fiction. Many retailers have already begun to harness the emerging technology to gain insights into consumer habits and develop more effective marketing campaigns.

How AI is currently helping retail

It's important to understand how today's AI differs from the AI you'd see in a science fiction movie. In media, AI is comparable to human intelligence. Today's AI algorithms can typically accomplish one very specific task. For example, you could talk to a chatbot for a few minutes about a shipping issue, but you wouldn't be able to get two seconds into a conversation about the weather.

Customer-facing AI solutions are still primitive, though they can be quite useful. In fact, a [24]7 survey revealed that 29 percent of online shoppers would rather use a chat window to speak with customer service, compared to phone and email.

Behind the scenes, current AI models can be even more useful. Retailers possess huge amounts of data about their customers, including shopping preferences and demographic information. However, this data is often too bulky, complicated or poorly labeled to be of much use to human marketers. In the time it would take a human researcher to locate and open the data, an AI could already have the information read and analyzed, providing marketers and user experience stakeholders with new, actionable insights.

Why AI will become more important to retail

AI technology is still in its infancy. The technology is bound to grow ever more complex with each passing year. Just look at how much more advanced today's iPhones are, compared with the very first model released in 2007.

As AI-powered technology becomes more commonplace, retailers could see a number of exciting use cases. For example, Amazon intends to open retail and grocery stores with no checkout counters. Shoppers simply fill a basket with goods and walk out of the door. Sensors record which items the shopper took and the system charges the shopper's Amazon account accordingly. The retail giant is also experimenting with drone delivery services.

AI isn't just for the biggest players in the retail space, however. According to Towards Data Science, vendors are creating all kinds of new intelligent technology for the retail space. For example, a virtual mirror could one day allow shoppers to try on clothes without needing to enter the fitting room.

Why retailers should strategize today

Retailers that add AI into the mix now may benefit from being ahead of the curve. AI-powered analytics solutions can help store owners better understand consumer habits and develop engaging campaigns. Likewise, analysis of marketing efforts can reveal trends in buying patterns that allow for optimization of operations and human resource management.

AI promises to bring many advantages to the retail industry. Retailers that invest now should be cautious, but there's no reason to fear a robot uprising anytime soon.

For more retail insights, visit our resource center today.