How Can AI Tools Transform the Retail Space?

Artificial intelligence (AI) has become an increasingly popular tool across a number of industries, with the retail space being no exception. Earlier this year, a report published by Fact.MR showed that global AI in the retail market has the potential to surge to $8 billion by 2033, expanding at 30.3 percent on a compound annual growth rate (CAGR) in just 10 years.

This being evidently good news for the AI industry within the retail market, here are five ways in which AI tools can transform the retail space:

Enhancing the Shopping Journey

AI has the potential to enhance the shopping journey for customers in a variety of ways, particularly when it comes to in-store experiences. By leveraging customer data and behavior, AI-powered tools can provide personalized recommendations, improve inventory management, and offer innovative solutions that can improve customer engagement and satisfaction.

AI can also enhance a customer’s shopping journey by providing them with outfit ideas based on their past preferences through data analysis. In addition, virtual fitting rooms that use AI-powered technology allow customers to see how outfits would look in different environments.

Gamified programs powered by AI can also enhance the shopping journey. These programs are similar to standard loyalty programs but are empowered by AI and data. By using customer data and behavioral data, retailers can offer personalized rewards and incentives to customers, which can help increase engagement and loyalty. Gamified programs can also make shopping more enjoyable and fun for customers, improving their overall experience.

Customer Service

AI is transforming the way in which retailers provide customer service by introducing AI-powered chatbots. Such chatbots are able to engage in meaningful conversations that help customers make informed purchase decisions, solve problems by turning negative experiences into positive ones, and provide help 24/7.

Improving Supply Chain and Inventory Management

The retail industry relies heavily on efficient supply chain and inventory management to ensure that products are available to customers when they need them. The emergence of AI has opened new doors for retailers to improve their supply chain and inventory management processes.

AI-powered tools can help retailers improve inventory management through demanding forecasting by leveraging customer data and behavior,  thus predicting future trends and ensuring retailers never run out of stock. In addition, AI algorithms can help retailers identify patterns in customer behavior, such as purchasing trends and preferences. Moreover, AI is improving inventory management through real-time inventory tracking.

Dynamic Pricing

Because AI can analyze vast amounts of market data and customer behavior, it can also ensure retailers stay competitive while maximizing profits.

Personalized Promotions

Finally, with AI-powered tools, retailers can create personalized offers tailored to each individual customer's preferences and behavior.

Although people like to speculate that the advancement of AI is so powerful we could be experiencing an episode of "Black Mirror," it's true that the newly developed technology can help retailers with other more complex jobs like task allocation and performance monitoring.

Newly developed AI-powered tools can help employers assign tasks to employees like quest-givers in role-playing games or help them evaluate employee performance in real time, providing feedback and support to help them level their skills.

Overall, AI is on the way to transform the retail sector, helping retailers stay up-to-date with the recent trends and on top of their game.

Daniele Servadei is the CEO of Sellix, an e-commerce platform that lets you sell any type of digital product or service with a custom storefront.