3 ways AI is changing retail

Today, Artificial Intelligence (AI) is everywhere. Especially where we least expect it. In stores, for example, AI is transforming our shopping experience. And self-checkouts and interactive catalogs are just the visible manifestation. Where AI is really changing retail is behind the curtain.

While AI has never stopped being a topic of conversation in recent years, the recent launch of ChatGPT has highlighted how this technology “will change everything.” So warns Fast Company, which has just named OpenAI, the company behind the popular chatbot, as the most innovative of 2023.

In this context, retail is no exception. In fact, it is even a pioneer. The demanding and competitive nature of this industry forces retailers to constantly look for innovative ways to optimize their processes and resources.

Innovation is part of retail’s DNA, and its survival depends on it. This is why it is becoming increasingly common in retail to use AI-based solutions, both to improve management models and interaction with customers.

And this is just the beginning. The size of the global retail AI market is expected to grow from $4.84 billion in 2021 to $31.18 billion in 2028, that is, a compound annual growth rate of 30.5% over the intervening period, according to Fortune Business Insights‘ forecast.

So let’s see how this AI-based digital transformation is changing retail.

A smart store is an efficient store

Supply management, inventory control, store logistics, team scheduling… Optimizing the overall operations behind the customer experience offered by retailers is without a doubt one of the key benefits. 

AI makes it possible to automate all these tasks and, furthermore, to carry them out in the most efficient way. That is, it does not only take care of the day-to-day mechanical functions that used to take more time and human effort, but it also does it in the most cost-effective and beneficial way for the team and the business.

The result? Significant savings in time and resources, while boosting store productivity and, as a result, increasing overall profitability. That’s why more and more stores are replacing outdated management tools with AI-based solutions.

Towards an increasingly optimized in-store experience

There is one thing that sets AI solutions apart from other tools: they are able to learn over time. In other words, this type of technology, in addition to automating certain actions, is capable of improving its response through the data it stores.

This aspect is an advantage for all store operations, especially for predicting demand and store needs. This is why AI-forecasting is becoming increasingly popular among retailers. 

By predicting variables such as store traffic or expected purchases, the retailer can adjust its organization accordingly, optimizing the overall experience it offers its customers. Moreover, the more data, the more accurate this prediction is and, as a consequence, the tighter the calculation of needs. 

For example, with the forecast of unique sales in a given period, it is possible to adjust the number of employees available in the store to the number of expected customers, in order to reduce waiting time. And this is just one of the ways in which a retailer can take advantage of this technology.

More tech, more human interaction 

Likewise, there is a common perception that AI is changing retail by increasingly suppressing human-to-human interaction. But this is not entirely true. In the case of stores, by taking care of day-to-day mechanical tasks, the use of this technology favors this interaction.

First, because it frees up time for in-store teams, which they can devote to providing more attentive, customer-centric service. In turn, AI can also help to get to know the customer better (behavioral patterns, preferred shopping periods, elements that influence their decision-making) for a more personalized service.

What is clear, though, is that this is just a glimpse of AI’s full potential in retail, not only to maximize operational efficiency and improve profitability, but to play a key role in transforming business models, from a strategic and structural standpoint, and in the way brands connect with their customers.

This is just the beginning, and the future looks promising. 

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