As the development and capability of artificial intelligence (AI) continues to rise, many remain cautious of a dystopian future straight from the realms of Hollywood. However, as businesses continue to search for the next innovative way to develop, AI is becoming an increasingly functional technological advancement. Thus far in 2018, the retail industry has seen revolutionary utilizations of AI that have had significant impact on the retail experience - for both customer and business owner.
Artificial intelligence is best defined as a machine or machines that can replicate the thought process we associate with humans, including the ability to make decisions, process and respond to human language, learn from experiences and process large quantities of data for problem solving. Whilst everyday software such as Apple’s Siri and Amazon’s Alexa give a perception of independent intelligence, they are restricted to a specific set of functions. Genuine AI, on the other hand, can match and even exceed the intellectual capabilities of the human brain, resulting in software that can be utilized in a variety of pioneering ways.
Revolutionising customer relationships
Self-learning algorithms are perhaps the biggest way AI is currently being used in the retail industry. AI algorithms can process and comprehend all the data retained by a retailer to supply an accurate understanding of the customer as an individual, producing a tailored customer experience based on behavior and activity in a matter of seconds.
Clothing manufacturer StitchFix, for example, uses self-learning algorithms to provide a personalized online shopping experience based on a customer’s style and lifestyle. From this data, they are able to recommend specific items of clothing best suited for that individual, continuing to learn more about them based on what they do and do not purchase.
Yet it's not just the online retail experience that has benefited from the development of self-learning algorithms. For example, vending machine distributor Hivery relies on AI installed in their products to optimise stock through collecting and processing the data of each individual machine and providing a reliable recommendation for the best mix of products.
Revolutionising the physical shopping experience
Though technological advances over the past decade have driven customers away from the high street in favor of the warmth and convenience of their own home, 2018 has seen AI begin to revolutionise the very concept of the high street store.
Amazon launched their first partially-automated grocery store, Amazon Go, in Seattle at the beginning of the year. The shop operates with no employees, with AI being used to supply a check-out-free system in which sensors track which objects customers put in their baskets, automatically charging customers’ accounts via the Amazon Go app.
Perhaps even more impressively, Wheely’s Moby Store emerged in 2018 as the most futuristic physical shopping experience yet. A functioning grocery store on wheels, the employee-less store is open 24 hours and drives itself to a warehouse to restock when needed. Moreover, it even features a digital hologram that greets every visitor upon entry.
With a projected 34% of customers spending more money in retail when artificial intelligence is utilized effectively, AI is expected to rise from a current $2 billion industry to a $7.3 billion industry by the year 2022. With major shifts in the retail experience in 2018 thus far, there’s little doubt that AI will continue to revolutionise every aspect of the retail industry in the years to come.
Simon Mitchell has run successful companies in Europe and the US that are focused on delivering exceptional value to clients – while Action Storage offers a diverse range of storage products, including lockers, shelving and racking, along with the technical expertise to help clients’ businesses operate more efficiently. In Simon’s words, that’s a rewarding place to be.