The Future of AI-Powered Retail: What Can We Expect?

With retailers recognizing the value and potential of artificial intelligence (AI), the future of the technology in the industry seems promising. As per Statista, retailers using AI and machine learning technologies typically perform better than their competitors.

According to Gartner, 91% of retail IT leaders are prioritizing AI as the top technology to implement by 2026. As more retailers embrace AI, a number of areas within retail are likely to become more sophisticated. We anticipate that the tech will significantly revolutionize customer experiences, analytical capabilities, and marketing strategies for retailers. In this blog, we take a look at these key areas retailers can expect AI to transform…

AI-Powered Personalized Experiences

Being able to provide meaningful tailored customer experiences is a priority for retailers, and AI can be of great help. A Statista survey showed that retailers plan to use generative AI (GenAI) to generate personalized responses for customer-service agents, create digital shopping assistants, and for personalized promotions to drive loyalty. Experienced retail technology providers gauged this interest and have already started to explore ways to leverage GenAI. Last year, Teamwork Commerce partnered with Google Cloud to develop new generative AI features in its industry-leading mobile Point-of-Sale (Mobile POS) and Order Management System (OMS).

Ultimately, the key lies in delivering value to customers. PwC found out that 70% of CEOs believe GenAI will significantly change the way their companies create, deliver and capture value in the next three years.

While retailers embrace AI, they must be mindful of striking a balance between AI-powered personalization and human-led interactions. Customers still crave the human touch as part of their shopping experiences, and retailers must not solely replace it with tech. Instead, retailers should use AI tools to empower their staff to automate repetitive tasks, stay more informed, and focus on providing high-quality shopping experiences to customers.

Improved Analysis & Forecasting

In 2023, a Statista survey found that predicting customer behavior and needs and improving their shopping experiences were the most popular reasons for 60% of professionals to use AI. AI-powered solutions can quickly analyze large amounts of data and produce actionable insights for retailers. However, retailers must be able to feed accurate and up-to-date data in real-time to enable AI to produce reliable results. In order to achieve this, retailers can leverage the latest Inventory Management Systems that provide real-time visibility with accurate data.

Retailers can utilize data from the past few years and identify key trends and common types of items that are best-selling during a specific time period. This allows retailers to prepare ahead of time and fill their inventory with the items that are expected to be in demand. Additionally, retailers can go above and beyond for loyal customers, analyzing individual customer profiles and creating personalized discounts using AI. As a result, not only can they retain their loyal customers but also increase the positive word of mouth for their brand, ultimately attracting more customers.

Targeted Marketing & Advertising

From AB testing to content creation, AI tools help marketers automate tasks, and create effective marketing campaigns efficiently. However, with growing advancements, AI can do a lot more. By leveraging data analytics, AI can significantly segment customers based on information such as purchase history and browsing behavior. AI algorithms can further analyze these segments to predict future behaviors based on their past interactions. As a result, retailers can gain better insights and target their marketing campaigns towards specific groups that are more likely to convert. AI tools can also analyze which campaigns are more effective, enabling marketers to allocate their budgets more efficiently focusing on high-performing campaigns.

Retail marketing professionals can also use AI to analyze social media conversations to understand public sentiment about their brand or product. This allows marketers to adjust their marketing strategies accordingly based on social media sentiment. This is significant because retailers can tailor their marketing campaigns based on ongoing sentiment in the market and make them more effective.

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