4 Ways AI Can Help Retailers Thrive This Holiday Season
To no one's surprise, this year's holiday shopping season promises to be unlike any other. While annual trends have already indicated that consumers were turning away from brick-and-mortar retail locations, COVID-19's persistence promises to break retail's online sales records this year.
As consumers trial alternative shopping methods, recent events have accelerated digitization in retail. For years, brands have leveraged robust online strategies to capture shoppers through advertising retargeting, app download promotions, and more. While this process has quickly become table stakes, 2020 has presented new challenges and opportunities to attract customers online. Now more than ever before, the question online retailers need to be asking is: What's our artificial intelligence (AI) strategy?
Key Areas Where AI Can Make A Difference
AI has become a key driver of success in the digitization of retail. As our shopping experiences continue to move online, it's important to understand the areas of retail where AI can deliver real value. I see that happening in four key ways:
1. Efficiency in Sales Processes
Integrating AI into your customer relationship management (CRM) tools, such as the use of voice dictation for data entry and the ability to access data through voice commands, has the potential to make CRM functionality quicker and simpler. Major players such as Salesforce and Zoho are already investing heavily in the emergence of voice as part of CRM.
2. Personalization of Experience
Personalization has gone from a perk to a prerequisite, but not all brands are prepared. A Forbes Insight Report noted that 54 percent of executives surveyed reported that personalization efforts helped them exceed their revenue targets. The report also noted that 24 percent of executives apply AI on a significant scale to deliver personalized experiences, and 25 percent see AI as essential to executing their personalization strategy. From improved purchase recommendations to AI-driven augmented reality interfaces for creating virtual fitting rooms, AI can help retailers build a more intimate and meaningful relationship with customers on a one-to-one level at a scale never before possible.
3. Implementation of Chatbots
Major brands, from Whole Foods to Sephora, have implemented chatbots as a way to scale their customer engagement efforts and drive sales. As noted in this Juniper Research report, specific tactics include loyalty programs, eStores/eRetail, coupons, time-limited offers/discounts, and perhaps most interesting, cart recovery. Chatbots can remind shoppers of the products still in their cart and ask them if they would like to proceed with the purchase, do nothing, or clear the cart. Juniper expects chatbot interactions will surge to 22 billion by 2023.
4. Inventory Management and Logistics
When you combine the volume of holiday shopping with the desire for personalization and expectation of immediate availability, it's clear that back-end logistics are an essential part of any retail operation. A small hiccup anywhere along the supply chain can mean key items are out of stock, resulting in abandoned carts or, conversely, an overabundance of a product that's no longer in demand.
The AI applications utilized to avoid mistakes and irregularities include time series prediction and reinforcement learning (RL) systems. Amazon.com already uses both to calculate supplier backorders, warehouse optimization, and stock levels across different locations.
You Get Out What You Put In
While AI can improve customer experiences as we approach the holiday season, retailers need to do it right. As with any AI application, the dataset must not only be robust, but high quality. Your training data, especially for a complex environment like retail, should be consistent, accurate, unique, cleaned and tested. The lack of a high-quality, comprehensive dataset can cripple your ability to deliver an effective product — and even shrink your addressable market.
To combat these challenges, a combination of automation and human-in-the-loop reinforcement is necessary. For example, retailers like Gap are using a combination of human effort and automation to perform dynamic product picking in shipping warehouses. While we continue to research the full automation of shipping warehouses, this level of human-in-the-loop AI shows great promise for e-commerce enterprises. Together, humans and machines can find ways to deliver customer orders efficiently, providing a stark competitive advantage to companies that adopt AI as part of their operational road map.
When the 2020 holiday shopping season comes to a close, and the analysis begins, the retailers that effectively harnessed AI to improve customer experiences will be the winners.
Wendy Gonzalez is the interim CEO at Samasource, a computer vision training data platform.
Wendy Gonzalez has over 20 years of experience building technology and teams, and is currently the President and Interim CEO of Samasource, the leading high-quality artificial intelligence data training company used by 25% of the Fortune 50 including Google, Microsoft, Walmart, and more. Prior to her role as Interim CEO, Wendy had spent 5 years at Samasource as COO. Prior to that, she led product and engineering at an IoT SaaS startup, held leadership positions at public companies in IT, and worked for over 10 years in management consulting.