3 Ways Retailers are Using Artificial Intelligence
Artificial Intelligence (AI) is changing everything from marketing to the airline industry. Scrolling through the tweets of participants at this year's SHOPTALK retail conference, it's clear that AI will shape the future of retail and customer experiences. eBay CEO Devin Wenig (paraphrased) says, "having an AI strategy is critical or you will die. AI is where mobile was at a few years ago." From personal shopping to predictive learning, companies are using cutting edge technology, like IBM’s Watson, to power artificial intelligence.
Here are great examples to help you understand how retailers are using AI:
1: The North Face - AI Powered Product Selector
Retail companies like the North Face have started implementing AI in interactive shopping. AI uses a dialogue-based approach to help customer shop. Called “Expert Personal Shopper”, it asks where and when the product will be used, who will be using it, and suggests products based on the data gathered. TRY IT HERE!
2: AI powered Out of Stock Management:
A key challenge for retailers is managing their inventory levels. Ideally, you have just the right amount of stock on hand to meet consumer needs. If you are out-of-stock, you lose sales. If you have too much stock, you have wasted money that you could have used elsewhere. So how can AI combat being out-of-stock? Watson is working with retailers to monitor weather, purchase rates and consumer behavior to do a better job of managing and monitoring supply chains to right size inventory levels and avoid out-of-stocks.
3: Shopping H&M via its Kik bot
Kik is one of the most popular chat apps among teens, with 275 million monthly active users. And 40% of those are in the 13 to 24-year-old demographic. In April of 2016, Kik launched its own bot store with 16 launch partners, including Sephora, H&M, Vine, the Weather Channel, and Funny or Die. Using Kik’s bots currently feel like using the Internet in 1994, very rough around the edges and limited functionality/usefulness. However, we’ll see how the API and bots progress over time. Kik’s popularity with an attractive demographic might convince some brands to invest in the platform.
Interesting facts about AI in retail:
By 2020, 85 percent of customer interactions in retail will be managed by artificial intelligence, according to Gartner.
According to Business Insider, shoppers who interact with online reviews and opinions are 97 percent more likely to convert with a retailer than customers who do not.
Seventy percent of US millennials and 62 percent of millennials in the UK say they would appreciate a brand or retailer using AI technology to show more interesting products.