In an era dominated by tech advancements, artificial intelligence in retail market is expected to emerge as a viable investment ground, given the pace at which AI is being incorporated in industry verticals. Amidst this backdrop, traditional retail chains have been modifying their approach, especially after 2017 witnessed the application for bankruptcy by 21 retail chains inclusive of biggies such as Toys R’ Us, Aerosoles and RadioShack.
Many others like Sears and Macy’s had decided to close down hundreds of stores in the U.S., creating waves of panic in the global retail sector and igniting the spark of technology adoption – shocking moves that have triggered a change in artificial intelligence in retail market trends.
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The proliferation of the smart era has made retail giants realize that the competitive scenario has been majorly transformed by e-commerce behemoths like Alibaba and Amazon, that had successfully created a paradigm shift in the retail industry with their efficient leveraging of big data and AI. The success that these behemoths have attained in the retail sector with the use of artificial intelligence can be largely credited to their organized efforts and technologies in tracking customer behavior.
Understanding the customer’s path to purchase and ability to observe their buying behavior has long since been considered a key factor to generate profits. E-commerce magnates have been using AI to maximize online selling and bombard customers with substantial options to make them browse longer than they intend. The strategy is to ultimately enable the customer to make a purchase that they might not have made in a physical retail environment. Retail chains in their struggle to match up to the competition are now using sensors and cameras to understand how customers are interacting with their store – a move that has majorly stimulated artificial intelligence in retail market share. Given that AI is being used to track how many times an item was picked up from the shelf, kept back on the shelf or purchased, a better understanding of the shopper’s mentality is being discerned, further augmenting artificial intelligence (AI) in retail industry outlook.
It is essential to mention in this context, that the aforesaid instance has been put to use in an impressive fashion by Amazon, the e-commerce giant, in its Amazon Go grocery store. The store that opened in Seattle in 2018 is based on futuristic design where customers use an Amazon Go app connected to their Amazon account to make payments. There are no physical cashiers or even self-checkout counters, instead, cameras and sensors keep track of all the items picked off shelves, put into shopping carts or are put back on shelves. The items are charged to the Amazon account of the customers automatically when they leave. The retail behemoth has thus successfully leveraged AI in its operations, justifying why it is one of the top-notch contenders in artificial intelligence in retail market.
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Amazon has used its advantage of owning the world’s largest cloud computing platform and applied it in building a store that not only delivers quality customer experience but also uses AI in figuring out what products customers buy the most and which hours are meant for peak customer purchases. It also keeps track of inventory about when to reorder and restock, how to present merchandise to make the most sales and how to optimize traffic flow around the store. That apart, it is virtually impossible to shoplift from the Amazon Go store. With others set to follow the example set by Amazon, artificial intelligence in retail market is bound to pick up a commendable pace very soon.
Though there is a popular fear that the widespread use of AI technology can cost humans their jobs, a fact which can somewhat hinder artificial intelligence in retail market growth, experts are of the opinion that AI can actually increase opportunities and even create a novel job market. For instance, though the Amazon Go store did not have a cashier there were plenty of people around the store who were needed to help customers. Therefore, AI is essentially evolving the type of jobs humans are needed to perform and increasing the scope of service on offer in the retail space.
The efficiency that AI can add to the workplace is anticipated to be blessing to the retail industry workers. Combined with the human connection presented by the average retail employee and the targeted marketing of AI, the retail industry is aiming to make a big difference in the shopping scenario in future. As per estimates, artificial intelligence in retail market size will be pegged at a remarkable $8 billion by 2024 – a substantially appreciable development from its initial valuation of $650 million in 2017.