Artificial Intelligence (AI) is one of the technologies that will greatly affect the retail industry and could help them save as much as $340 billion annually by 2022.
Companies in the retail industry are implementing AI technology to improve efficiency of their supply chain planning, demand forecasting, customer intelligence, marketing management, store operations and pricing and promotions.
Source: Software Advice
Amazon has a large database that uses machine learning, leading to a more accurate predictive analysis and increased personalisation hence better serving their customers with targeted recommendations. As such, they are able to make deliveries within 1-2 days . Being the leader of this industry, companies should keep up with Amazon’s standard and aim to have their own innovative system and technology to have a competitive advantage, unique to their own to create a differentiation.
AI provides insights of their behaviour and trends that could aid management in making informed and accurate decisions such as dedicating their marketing and promotional efforts to serve specific customers and building a relationship with them. To be continually persuasive, constant improvements and enhancement of customer experience is also paramount to maintaining loyalty.
To prevent extinction and to remain at the head of the game, retail companies should integrate AI into their marketing strategies. By understanding its consumers, AI would have the ability to identify new revenue streams where the company could use as an opportunity to expand its market through creating new uses to its products and targeting a new segment.
However, when implementing AI, companies have to be wary of algorithmic bias, which could not only lead to inaccurate decisions and be detrimental to the company.
What other benefits do you think AI would bring in the near future? Let me know!