Retail is a fast-moving sector, and success in the industry means keeping up with technologies. Artificial intelligence (AI) in retail is one of them, and evidence shows that this is the future of retail

1. 11/7/2019 4 Reasons Artificial Intelligence is the Future of Retail
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4 Reasons Arti cial Intelligence is the
Future of Retail
Usm systems
Nov 7 · 4 min read
Retail is a fast-moving sector, and success in the industry means keeping up with
technologies. Artificial intelligence (AI) in retail is one of them, and evidence shows that
this is the future of retail. Here are four reasons:
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1. AI offers a variety of use options
Retailers are often reluctant to try emerging technologies. Capgemini Research Institute
has examined in depth the impact of AI on retail and a comprehensive study has revealed
many exciting things. For starters, the number of retailers implementing AI in their
companies is growing. And they focus on customer-facing applications in nearly three-

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quarters of cases. Moreover, the study showed that retailers could deploy AI in their
operations and save over $ 340 billion by 2022.
As an example of where those savings may originate, the authors of the paper give an
example of Otto, the German e-commerce brand that uses AI to predict consumer buying
patterns. By making more accurate suggestions to shoppers, Otto reduces the revenue of
more than 2 million items per year.
Other companies use AI to prepare packages in warehouses or distribution centers by
implementing technology in item picker assistants that workers use when re-opening
shelves or ready to ship goods. Given the assortment of options offered and greater
accuracy on the horizon, retailers have no shortage of ways to work with technology.
This helps determine the power of AI.
2. We want personalization that customers can give
The above brief mention of using AI to reduce return rates is just one example of how
technology can help personalize the shopping experience. Epsilon’s research found that
80 percent of respondents were more likely to do business with companies that offer
personalization, while 90 percent indicated that personalization was attractive.
It is not surprising that retail professionals tend to recall past trends leading up to this
stage. For example, subscription boxes are the top trend of 2017, and many of today’s
most popular ones use some degree of personalization.
Birchbox is a popular beauty product subscription box that allows people to select at
least one item in their monthly box or choose from an assortment of free samples when
they buy something from the Birchbox Store. Customers may indicate a preference for
all-natural products or goods for curly hair.
Going back to AI, it promotes personalization in various ways, especially through
improved marketing. A person can view different versions of the retail website based on
past interactions with the brand or receive coupons with their product receipts that align
with the products they are most likely to buy.
Going forward, users will remain with AI-based personalization for the future as long as
it does not invade privacy. Lack of customization often leads to absurdity, which can

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make shopping less fulfilling.
3. AI promotes better decision making
Analysts expect 2019 to be the year that AI and machine learning — a subset of AI —
become critical for retail decision-makers. Those technologies can help brands figure out
which items people want most and which ones don’t sell fast. Then, they can use this
data to meet customer data and avoid waste.
French multinational retailer Carrefour has recently begun using the AI-driven analytics
platform for demand forecasting. Running the pilot for 18 months, the brand collects
data for its stores, online orders, and warehouses, and then uses the information to
create customized algorithms for storing items, but not too much.
No matter what they sell or how many customers they serve, retailers always try to make
better-informed decisions. AI helps them analyze data better than humans can do it
alone.
4. AI reduces theft
Most retail stores have cameras, door alarms and on-site damage prevention specialists
to help prevent shoplifters. There is still value to those preventive measures, but AI is a
useful supplement.
According to the National Retail Federation, inventory losses — also known as
“shrinkage” — result in significant costs for retailers. The collapse of the NRF’s study on
retail security had a $ 46.8 billion impact on the retail economy in 2017.
AI makes that numberless substantial. There is an AI technology called Stoplift, which
helps people find things they can do to cheat self-checkout kiosks and go out for unpaid
merchandise. Also, the Japanese-made AI security camera also detects suspicious
postures that signal that someone is trying to steal things.
Retail theft is an issue that should not go away. Even the people who oversaw the first
shops that existed had trouble stealing. Thankfully, today’s stores are far less antiquated,
and AI can give retailers valuable strategies to pursue.

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AI will help retailers grow
Some aspects of the retail industry, such as shopping malls and brick-and-mortar chain
stores, have experienced a severe downturn recently. And there will inevitably be other
hard times ahead. AI is not the solution at all to secure the future of retail, but here it
highlights why the things highlighted can make meaningful profits when used to
overcome business barriers and cater to customers.
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