AI in Retail: The Past, Present and Future
Automation in retail was introduced many decades ago – from mass manufacturing to point of sale (POS) systems to next-day delivery, companies have been moving at the speed of light to meet growing consumer demand and expectations. And while artificial intelligence has existed since as early as the 1940s, November 2023 will go down in history books as the start of the “generative AI” revolution.
Generative artificial intelligence (AI) is now literally transforming how organizations operate in the modern world. By leveraging the pre-trained ‘agent’ capabilities made possible by large language models (LLM) such as OpenAI, retailers are gaining new competitive edges by increasing efficiency and improving user experiences across nearly every business function. Even in its relatively early stage, generative AI can benefit many different functions, including customer service, marketing, sales, and operations.
For retailers, implementing AI systems can help analyze large volumes of data faster and autonomously identify individual customer patterns and trends to deliver hyper-personalized engagements resulting in better outcomes:
- Assist customers when they reach out – help them to find order status, help with returns/exchanges, help with questions related to sizing, etc. - all without human intervention
- Remember an individual customer’s behavioral preferences and demographics to trigger engaging, ‘just in time’ conversations via SMS, email, chat, and native mobile app that create new revenue streams
- Manage subscriptions autonomously;
- Trigger follow-up on abandoned shopping carts and offer self-service capabilities.
Regardless of the function implemented, AI’s potential to revolutionize the enterprise landscape is undeniable - and is already moving fast in making its impact. As a retailer, it’s detrimental to sit back and watch competitors harness the power of generative AI without taking explicit action. Companies, including clothing brand Faherty, utilize Airkit.ai to achieve these competitive advantages and more.
Here are five ways that generative AI is transforming the retail sector today:
Generative AI can automate many internal and external processes, reducing the need for human intervention – from mundane tasks such as data entry to super complex tasks like building workflows from purchasing to shipping, accomplishing end-to-end workflows in a fully-autonomous manner. Workflow automations ultimately allow employees to focus on more business-critical tasks, such as handling and packing inventory, and addressing more complex customer needs, resulting in increased business productivity and higher CSAT scores.
Generative AI provides a decisive advantage to the marketing, sales and customer service arms of retailers by producing personalized offers and campaigns specific to an individual’s browsing and shopping habits. For example, one of Airkit’s retail customers is using its AI platform to analyze customer data from POS and helpdesk systems to deliver tailored services and products that reflect the individual’s purchasing history and preferences. In less than a year of leveraging this technology, this retailer has seen a 30 percent improvement in repeat orders and a 65 percent increase in overall sales. It has also allowed the brand to extend its reach by creating virtual brand concierge agents that can be saved by customers as a contact on their phones for instant service when and where they need it.
- Predictive Analytics.
Generative AI can also be used to plan by analyzing historical customer data to predict future trends and customer behavior. For example, this could allow the retailer to provide services such as auto-recommending items for a shopping cart based on what the system has learned the customer might enjoy. AI-driven predictive analytics will empower businesses to exceed customer expectations by thinking ahead of them and maximizing profits.
Generative AI can help businesses become more efficient and streamline processes by reducing human error and/or identifying areas of (time/resource) waste that can be eliminated, leading to significant cost savings. For example, when a retailer needs to work with a transportation/logistics company to track shipment status, if this company has incorporated generative AI technology, the retailer can check for specific objects in an order status, confirm the availability of a specific item in inventory and automatically progress the order to the next stage. AI advancements will only accelerate the ability of organizations to realize meaningful efficiency gains in the days, weeks, months, and years to come.
Although this area is very much still in the exploratory mode, generative AI is being used today by organizations to secure businesses against cyber threats by detecting likely vulnerabilities before they become an issue – and, more importantly - helping businesses to take action to protect against malicious actors. The evolution of security technology continues to grow at a mind-dizzying pace, and generative AI has the potential to further accelerate the role of security in the near term.
As generative AI continues to evolve and become more sophisticated, organizations – including retailers - must take advantage of its potential to stay competitive and maintain their customer base that has come to expect access to personalized, value-add engagements with brands. If brands don’t listen and act to meet this need, they will likely fail. AI can automate processes, personalize services, predict future trends, increase efficiency and secure businesses against cyber threats. By taking advantage of these capabilities, retailers will gain a competitive edge, increase their profits and better position themselves to meet the needs of the customers of tomorrow.
Adam Evans is co-founder and CTO, and Stephen Ehikian is co-founder and CEO at Airkit, the low-code platform that makes it simple to collaborate, build, and deploy enterprise apps and automated workflows.
Stephen Ehikian is the Co-Founder & CEO at Airkit, the low-code platform that makes it simple to collaborate, build, and deploy enterprise apps and automated workflows. He was formerly the VP of Product at Salesforce and COO/CFO at SalesforceIQ, which was called RelateIQ.
Adam Evans is a co-founder and CTO of Airkit, the low-code platform that makes it simple to collaborate, build, and deploy enterprise apps and automated workflows. Adam previously was an Entrepreneur in Residence at Morganthaler and co-founded RelateIQ which was purchased by Salesforce. He leads Airkit’s engineering and product team with a unique blend of technical know-how, business savvy, and a strong product vision.