3 Reasons Retail Stores cannot succeed without AI.
There are important transformations and key technologies retail needs to embrace to stay relevant. But none more important than AI.
There is a fairly broad consensus that stores ought to evolve into an experience to get the required return. Use the space not only to sell but also to connect with customers and convey the brand fundamentals.
There is another consensus that retail need to quickly update their DNA with digital genes. Capture and use data to stay competitive.
Alibaba and Amazon have data driven DNA and AI feast on data. That’s where Amazon anticipatory shipping (shipping products before purchase) is coming from.
There isn’t one single part of retail operations where AI isn’t useful.
In this article we focus on AI in stores and give 3 of the many reasons AI is becoming central.
Knock knock, who’s here?
Most retailers don’t know who walk in their store. That’s step one. No need to go any further. Without that critical information retailers will not be able to participate in the full customer journey. They will offer a place to warm up in the winter or cool off in the summer but they won’t capture the essential information allowing them to enter the digital life of their clients. For a tiny fraction of retailers’ costs Amazon capture every bit (!) of data about that customer. The game is uneven.
Using facial recognition, AI analytic delivers website level metric (gender, age range, unique visitors, returning visitors, time spent in store …).
AI store analytics boosts store ROI, turning real estate into a powerful data capture environment.Without that data, retailer will never be able to even start competing.
Why didn’t you buy?
Alibaba and Amazon know their customers better than themselves. Of course they know past purchases but as importantly they know browsing habits and all these times when customers do NOT buy.
Learning what customers DO NOT buy is as critical as knowing what they buy. We have known the later forever, AI helps stores capture the former. Website do that well. Heatmap and visited links help derive patterns. AI powered website analysis helped increase conversion by 30% using A/B techniques for site merchandising.
We can expect AI to deliver similar metrics for stores.
Different techniques exists to achieve this. One consist of integrating more digital into the store experience: Simple pragmatic approach: Bring digital product inventory in store. Extended store inventory is a pillar of clienteling. AR helps make it more sexy but in effect that’s the same thing. Example: The beauty industry is deploying digital screens for makeup experiences to ensure a) full product selection and b) improve the capture of customer browsing, including what they don’t buy.
Personalized Merchandising to increase customer engagement
In a world of personalized social feeds and custom ecom offerings it is challenging for stores not to take advantage of their space to that effect.
Ideally each store visit will become custom tailored.
As a starting point AI can suggest the best product for a client, like the Alibaba Fashion Assistant which achieved record setting sales. But AI doesn’t need to involve high tech display. It can – and in most cases should – be hidden from view.
Only very top sales associates are able to engage on an ongoing meaningful discussions that evolves into a trusted relationship with their clients. AI will help all sales associate engage into meaningful, trust building discussions with customers. Discussion will start in store and they will continue when the customer has left the store. Maximizing sales associate downtime and empowering retailer to engage into customer’s’ digital journey.
When to start?
For many successful retailers AI is already hard at work. It helps anticipate demand, automate inventory decisions, improve merchandising and yes, personalize marketing.
Retailers using AI see very promising results.
Alibaba and Amazon are heavily invested in AI at any level.
They will bring it to Wholefood, Amazon Go and all their other locations.
The time to engage is now.
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