Artificial intelligence (AI), which dates back to mid-twentieth century, is currently causing disruptions, creating digital waves and contributing to the automation explosion due to improvements in computing power. Artificial intelligence and machine learning are enabling businesses to improve their topline by customizing and effectively meeting and exceeding customer expectations. Consumers’ needs are dynamic and in this digital age, they expect service delivery on the go, 24/7, 365. Artificial intelligence is revolutionizing customer experience and for retailers. It has offered a platform for retailers to get insights into their customers’ behavior. Intelligent algorithms are enabling retailers to create unprecedented customer experiences.
Individualization – Customers expect retailers to understand them and to make accurate recommendations for products based on their previous interactions with the retailer. Through machine learning and artificial intelligence, retailers are able to sift through vast amounts of data using intelligent algorithms and come up with customer insights that enable them to make precise recommendations to their customers. As a result of this individualization, consumers establish personal connections with brands. Artificial intelligence guarantees contextual relevance thus enabling retailers to build customer loyalty.
Chatbots– IBM established that 65 percent of millennials prefer interacting with bots to talking to live agents. Chatbots enhance customer experience since they deliver services and offer recommendations 24/7. Virtual assistants get into a conversation with customers, therefore, enabling businesses to understand their customers’ intent. A faster than real-time customer service experience is making automation a hit in the retail realm. Customers are all about convenience and AI has taken convenience to a whole new level. Retailers are able to attend to their customers more conveniently and meaningfully using virtual agents.
Visual shopping – Shopping experience is changing and consumers continue to raise their expectations given the options around them. To meet the rising demands of consumers, retailers have integrated product imagery and videos of products to their customer experience efforts. Retailers are using visual content to enhance customer experience and prompt potential customers into action. Retailers can now use visual shopping to ensure that they reduce shopping cart abandonment and build customer loyalty.
Enhancing customer experience using augmented reality and virtual reality – In order to meet the rising demands of their customers, retailers are incorporating virtual reality in service delivery. Retailers are using virtual reality to save consumers the agony of going through and having to try out different colors just to decide on the perfect outfit. Virtual reality also enables consumers to use 360-degree images of their living spaces to see whether a sofa-set they intend to buy fits in their living spaces. This saves consumers the time, energy and the hustle that comes with the uncertainty.
Managing inventory – Managing inventory is a big challenge for retailers. Retailers want just the right amount of stock to ensure that there is an equilibrium between what is demanded and the inventory available at a particular point in time. IBM’s Watson cognitive system is assisting retailers in managing their supply chains by giving them insights into consumer behavior and factors that are affecting demand. Not having what is demanded is not good for business and having capital locked up in the form of inventory is also not good for business.
Although artificial intelligence is still evolving, major strides have been made and early birds are already starting to enjoy the fruits of this evolution in the form of improved efficiency, reducing costs, and better returns on investments. Businesses that are slow to adapt are on the brink of missing the bus.