Artificial intelligence points to a bright future for retail
I’ll let you into a little secret. I really
don’t enjoy shopping. Yes, I know that sentiment will resonate with many people
– men in particular – but I feel it with a passion. My frustrations came to a
head recently when I was buying new shoes in Central London. The traffic to
reach the store, the general indifference of the staff, the fight to find the
right style of shoe. And then the inevitable comment from the member of staff,
“Sorry, we don’t have the shoes in that size”. Shopping and I don’t go
together.
It’s no wonder retail is changing. The Internet
has been a magnet for many, drawn by the convenience, speed, and typically
lower cost of online retail. The shoes I trawled London for were ordered at 7pm
and delivered by 9am the next day, for example.
Now we’re in the next phase of retail change.
Being a total tech geek, I’m fascinated by the emerging opportunities
surrounding artificial intelligence (AI) and its influence on how retailers
operate and how we consumers buy. This is game-changing technology, linking
sales, customer, and other data analytics to turn my static retail journey into
a smart one. Retail stores – both online and physical – can react, learn, and
adapt in real-time based on data such as click-stream and social activity as
well as inputs such as weather, lookalike audiences, and Internet of Things
data.
Amazon Go is a great example of how AI may
progress in retail. Customers can choose their food shopping and stroll out the
store without having to queue up and pay at the checkout. Sensors track
customers as they move around the store, record items they pick up, and have
the cost of their purchases automatically billed to their Amazon Prime account.
Fast, simple, and frictionless.
Virtual reality also points to a bright new
future for online shopping. In China for example, Alibaba recently launched
Buy+, a virtual reality experience using a virtual reality headset. Customers
can walk through a virtual store, browse items, and add items to a shopping
cart if they stare at a product for long enough.
There’s clearly a long way to go. The cost of
deploying AI systems within largely proprietary retail environments will be a
barrier for some. However, there’s no mistaking AI has the potential to
transform the customer experience, improve a retailer’s inventory turnover, and
increase revenues. In an ultra-competitive retail market, defined by low
margins, it’s also a significant business differentiator.
It also has the potential to change this
author’s perception of the retail experience.
To find out more about AI and its influence
on business, Oracle has produced a fascinating series of O-Talk videos on the
topic. You can view them here.
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