We're a buying society, there's no way around it. I'm told there was a time before advertisements were a fact of life. Supposedly humans existed in a world before we derived utter joy from buying a fresh pair of shoes or the latest iPhone. But that was long ago, before the retail age. Non-essential shopping has long been a fact of life in the developed world, and the global retail industry is deploying AI to make the buying experience smarter. The state of retail now will tell us about its future, at least in part.
These industry insiders are watching how AI is being used in retail. Here's what they told us about it:
1. Gil Larsen, Vice President of Americas at Blis
“AI is improving the retail experience by creating a more automated, seamless and personalized experience for shoppers – enabling online shopping to be akin to that of in-store and improving convenience in brick-and-mortar locations. Online, it’s giving customers the ability to virtually “try on” outfits from the comfort of their homes, helping to increase sales and reach an audience that may dread the often arduous process of trying on clothes. In stores, AI-powered robots handle everything from stocking shelves to helping customers find their desired item.”
2. Alexandra Sheehan, B2B Retail Copywriter for Shopify, Vend POS, and Stitch Labs
“The truth is, AI is more ingrained in the retail experience than many consumers realize. It’s used in the live chat experience on the website or in the app, it’s what sends customers post-purchase emails with personalized product recommendations, and it’s how you can scan a barcode while in-store and learn more about the product. On a more innovative level, AI is changing how retailers manage operations and backend processes. In many cases — like Amazon’s cashierless store or Lowe’s stores LoweBot in-store “associate” — AI is also a PR tool, creating buzz and driving press coverage about how the technology is used in the in-store experience.”
3. Mike Callender, Executive Chairman at REPL Group
” AI in retail on the whole is in its infancy. It is being quickly adopted in the supply chain areas of demand planning with its ability to forecast items being sold for replenishment purposes and also in long-range planning of demand. We are starting to see AI being used in other areas such as price optimization, labor planning and long term financial forecasts. The biggest use of AI in retail at the moment is chat bots around customer and sales service support online. AI is also being used by online retailers to market to individual consumers.”
4. Shep Hyken, Customer Service & Experience Expert, NY Times Bestselling Author of Amaze Every Customer Every Time
“AI is giving retailers incredibly helpful insights to buying behaviors and patterns of their customers. It can help spot trends from a larger demographic of customers as well as help personalize the experience for segmented groups of customers. And in some cases, AI can help deliver a truly personalized experience for the online or digital retailer – or give the salesperson info about the customer, interpret the information, that will create a better, more personalized experience.”
5. Vidyuth Srinivasan, CEO of Entrupy
“One application of AI in retail, especially for the secondary market, is product authentication. And now that legacy retailers like J.C. Penneys and Macy’s are hopping on the resale bandwagon, this use case will be more and more critical.
To date, authenticating products on the resale market has primarily been done using manual and subjective processes. These are neither reliable nor scalable enough to adequately protect consumers – and the reputation of the retailer. But using Artificial intelligence coupled with microscopy, we can now verify the authenticity of high-value products with complete objectivity and at any scale, no particular human expertise needed.”
6. Brian Walker, Chief Strategy Officer at Bloomreach
“This is an interesting question. On the one hand, more and more retailers are investing in AI capability. There are a lot of benefits these businesses are seeking, from driving more revenue through personalization and targeting, to optimizing margins by driving inventory turn over and reducing returns, to automating the many manual tasks in their staff need to do so they can do more of the higher value things they struggle to get to. And yet, it is still early days for AI, with the skills and investments still largely out of reach for all but the largest retail businesses. So while AI has been talked about a lot over the recent years, it is still largely early days in the retail industry. This is of course the opportunity solutions like Bloomreach provide, by helping retailers of all sizes leverage over 10 years of AI investment together with the expertise on how to best apply AI to their business.”
7. Michelle Bacharach, founder and CEO of FINDMINE
“AI is in its infancy and yet has been able to make an immediate impact on changing the shopping experience as we used to know it. Ultimately it’s making the buying experience smarter for the retailer and the consumer.
For the Retailer, AI can improve merchandising efficiencies, control logistics + operations, reduce fraud, give insights into buying behavior, and automate content production (that’s what FINDMINE does) to drive incremental revenue and deliver more brand-building experiences, among other applications.
Eventually saying “we use AI to do X” will be like saying “we use technology to do X”. Duh! Everyone uses technology for all sorts of applications. AI is the same way, but it’s “newness” makes people still describe it as if it’s a stand-alone end in and of itself, rather than a means to an end. Savvy investors and tech buyers will roll their eyes when they see “We use A.I. for X” in pitches, but the media has doubled down on the issue of highlighting AI as some mystical standalone thing. In the next several years you’ll see this calming down as it becomes more ubiquitous, like “the internet” “mobile” or “technology” as concepts today.”
8. Brian Kilcourse, Managing Partner at RSR Research
“AI is used by retailers to be able to target more personalized value offers to consumers in the digital space. Retailers are also increasingly using AI analyses to model patterns in non-transactional demand data to improve planning. AI (natural language processing) is used for voice command recognition (call centers, consumer voice-activated devices). New applications having to do with visual recognition are starting to appear.”
9. Yigit Kocak, Inbound Marketing Manager at Prisync
“The rise in artificial intelligence is a key trend that has gained significant traction this year. However, the actual use of AI hasn't gone further than basic chatbot templates that aren't adaptive and only acts in certain conditions. This is mostly the same for any AI implementation in the retail industry today.”
10. Sanjeev Sularia, CEO of Intelligence Node
“AI technology tools can be applied to almost every stage of the retail buying journey – from manufacturing and inventory planning to customer service and pricing. Overall, the retail industry’s adoption of AI technology is in its early-stages but is accelerating. The majority of retailers are aware that AI-based tools are available and have started investing in AI-based customer experience tools like chatbots. Fortune 100 retailers have been investing in tech talent to develop AI capabilities and/or acquiring AI startups and integrating their services to support the core business. Unfortunately, it’s the mid-tier retailers and brands who perhaps most need these tools that have been slower to adopt AI technology.”
11. Sean Byrnes, CEO of Outlier
“Lots of retailers are experimenting with AI. Some are using basic AI to suggest relevant purchases or deals to buyers online or in stores. Some are automating inventory data management or customer engagement actions. But it's still in the early stages.”
12. Akhilesh Tripathi, Global Head of Digitate
“AI's ability to optimize supply chain performance, minimize delays and anomalies and cut costs through cognitive automation is helping the retail industry overcome IT limitations and make a positive difference on bottom lines. The retail industry is rapidly transforming with the adoption of AI and it shows no signs of slowing down any time soon. In fact, analysts at Global Market Insights predict that investments by the retail industry in AI will surpass $8 billion by 2024. And a study released by IBM in January at the National Retail Federation’s 2019 Big Show found that retail is using AI to transform everything from supply chain planning to demand forecasting, customer intelligence and store operations, among other use cases.”
13. Trey Courtney, Chief Product & Partnerships Officer at Mood Media
“We're still very early in the adoption of AI in the in-store area. Most of the adoption is being driven in the online commerce area with investment in chatbots, product recommendation engines and preference scoring applications. Over the last few years, retailers have performed pilots and trials in-store with different AI-driven applications such as Digital Racks, Virtual Assistants and robots but nothing has been scaled across an entire retailer's location footprint. The reasons for this are: 1. Retailers are still working to understand the underlying technologies that drive AI solutions. 2. The vendors and underlying technology are changing rapidly so no one wants to roll something out that becomes obsolete in three months. 3. Retailers need to figure out how to operationalize the changes in staff, processes and systems to accommodate AI solutions across their physical locations.”
14. Jeff Hunt, founder of Snap36
“It's certainly in its infancy. But there are a lot of possibilities. Right now, companies are mainly using it to streamline operations and reduce costs.
For example, let's say you are in Chicago, and you click “buy” on a product. The product may be in stock in a warehouse in Milwaukee and in Minneapolis.
In the past, a company may have put that product to ship on a truck that comes out of Milwaukee, since it's closer. But an artificially intelligent system may figure out that the truck coming out of Milwaukee is only 5% full, whereas the one coming out of Minneapolis is 98% full. The system will make the call to have that product shipped from Minneapolis in that case, since it would be a lot cheaper for the company. That's a pretty easy calculation for a computer to do, but a really complicated one for a human to do.
Not only that, AI can even integrate weather predictions, so companies can plan to ship and stock accordingly. If there's a possibility of monsoon, a retailer can stock more raincoats than usual, and also re-route trucking patterns to avoid weather delays”
15. Oz Etzioni, CEO of Clinch
“AI is in its infancy when it comes to applications in retail advertising and marketing. The vertical is using basic features and/or shelf products (no pun intended) to utilize specific channels – mostly in email and social media – and some retailers use data collection and analysis to better understand their audiences. However, most retailers that have both online (eCommerce) and physical Stores presence lack the tech stack to support their 5-10 year roadmap.
In order to compete with the likes of Amazon and Walmart, retailers need to start implementing AI and automation in every aspect of the process- from identifying new potential consumers, all the way to making them long-time loyal customers. AI can accelerate and revolutionize every aspect in which a retailer can be smarter, faster and more cost-efficient, without increasing headcount linearly. When AI refers to marketing, it should start with the retailer roadmap and finding the right partners to support such a transition. True AI-powered personalization technology that can support the data, channels and online/offline executions is required to support the growth and competitiveness of the retailer in an AI-driven market in the long run.”
16. Chris McCullough, CEO and co-founder at Rotageek
17. Kevin Sterneckert, CMO, Symphony RetailAI
“Today, the retail industry is taking its first steps into a highly transformative era in which retailers leverage AI to improve their businesses. At this early stage, companies understand AI’s potential and are using isolated instances of AI to improve specific processes – to a truly impressive degree – but AI is not yet fundamental to the identity of the business.
From the supply side, a large number of technology companies talk about the capabilities of AI within their tech suite. But there are far fewer companies that actually have AI-enabled solutions driving efficiencies for customers, and even less than that can offer an AI platform that is scalable, enterprise-grade and built for large companies.
Technology is maturing rapidly, and innovative retailers are attracted to advanced AI platforms built on machine learning technology. These platforms can identify what has happened, determine why it happened, and provide a recommendation of the best path forward with a high degree of accuracy. Until this becomes ubiquitous, however, we’ll continue to see most retailers adopt only isolated applications of AI as part of their decision-making processes.”
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