By Vitaliy Kurat
Throughout the existence of machine learning and artificial intelligence technologies, the most important question of each next year is when will these innovations reach the human level of development? In a sense, they have already achieved this goal and even surpassed it in some respects. However, at the moment, AI can be considered an assistant, but not a substitute in the processes that still require human participation. According to statistics, by 2030, 30% of global companies will use AI at least one of the links in the sales process. In the meantime, we’ll see what can be expected from AI and ML for retail in the already-coming 2020.
AI and ML in Retail: Improvements We Should Expect in 2020
There is no need to talk about the impact of big data on business — as soon as companies got the opportunity to collect, analyze and make predictions based on data, this automatically meant a point of no return to outdated approaches to business. In 2020, this trend continues, and this is what we will see this year regarding AI and ML in retail.
1. AI Price Prediction in Retail
This is how AI works on price prediction in retail. By analyzing historical information and comparing it with current data in dynamics, AI systems are able to make predictions about consumer moods and abilities in terms of pricing strategies. AI is able to identify patterns invisible to the human eye and make the most accurate assumptions about what price will be beneficial for both the retailer and the buyer at a given time.
2. AI Price Optimization in Retail
As for AI price optimization in retail, with predictive data, in 2020 it will become possible to optimize and personalize prices as much as possible. Optimization and personalization are correlated as general and particular, and this year, optimizing prices for a whole set of customers and personalizing them individually, retail brands will be able to get even more benefits, and customers will have even more memorable experience.
3. Smart HR Management
The ability to perform routine tasks without requiring wages or interruptions was the very first way to use AI in business processes. We could already observe the development of smart HR systems and hear that very soon robots will replace managers in the interview process. However, this will most likely be a little later.
In the current year, AI will continue to help solve standardized tasks related to the search and selection of personnel, and will also give the business owner the opportunity to review his approach to personnel management. Due to the optimization of labor, more thought-out work schedules, the possibility of predicting force majeure, it is expected that employees of leading retail companies will become more flexible and happy. That means they can make customers happy as well.
4. Elimination of Waste
There are global hopes that in 2020, food retailers will be able to use all the potential of artificial intelligence to reduce the number of spoiled and discarded products. This will be possible by predicting demand and optimal prices, and smarter organization of food delivery to points of sale – to avoid cases when grocery goods arrive with signs of deterioration and decay. The same goes for hotel and restaurant chains, but that’s another story.
5. Fraud Detection and Prevention
The retail industry is the most attractive area for fraud since in each transaction we deal with real goods and money.
The number of fraudulent attempts is growing every year, and there are suggestions that this line will still creep up. However, retailers who put AI on guard of fraudulent attempts will still succeed in slowing the growth of this indicator — by analyzing the data in dynamics and preventing fraudulent attacks. Yes, there is always a probability of a false positive result; however, modern systems learn to work with more and more data and identify the most implicit patterns in order to minimize the number of such cases.
6. Even More Advanced Logistics
We already said a few words about logistics when we talked about the possibility of reducing food waste. It is expected that fast delivery organized using AI systems will become one of the priorities of retail brands in 2020. And here we will focus not only on improving the experience of users who want to receive their goods not tomorrow but by the wave of a magic wand. More and more brands will focus on smart delivery to cater to the generation of millennials – fierce opponents of trash and environmental pollution, which by the way, yes, also want to receive their goods instantly.
AI in Marketing: Promising Opportunities Are Here
At this stage, we came to the most interesting AI in marketing opportunities of AI, which will help sell more. Without ignoring the user experience, of course.
7. More Personalized Loyalty Programs
For several years now, we have been hearing about personalization wherever this word fits at least minimally into context. Well, 2020 will not be an exception. By analyzing an increasing amount of data and finding the deepest patterns of behavior, retailers will strive to bring personalization experience closer to the absolute.
8. More Robotic Consultants
We already know some examples of successful work of robots in business, and this year the number of these examples will increase. Therefore, do not be surprised if one day in a shopping center a robot seriously offers you its help.
9. Improved Product Layout
In 2020, retailers will also focus on saving the cost and effort spent. Therefore, we should be prepared for the fact that the procedure for displaying goods in stores will be reviewed and optimized based on data on customer buying behavior. And in fact, finding what you need on the first try is a great experience and an incentive to return.
10. Virtual Fitting Rooms
Augmented reality becomes real, and in 2020 more and more retail brands will invest in these technologies to create virtual fitting rooms. The goal of this is simple – to provide innovative experience and save the customer time.
11. No Fake Reviews
False reviews are a real headache for any business. And for any client who wants to make the right choice. At the moment, such systems have already been created and are in the training stage. Such algorithms learn to recognize the style of writing, the specifics of the speech, the accuracy of feedback, and even the mood of the person who wrote this review in order to determine whether the review is true or custom. And this applies to both bad and good reviews.
12. Visual and Voice Search
Everything is clear with visual search – this is another opportunity for buyers to buy what they really want, and retailers to sell it to them, respectively. However, the trend of voice search will change the approach to content strategies. Now retailers will have to create, optimize and place their content in such a way as to take this trend into account since the request like “buy a dress New York” will be replaced with “where to buy a dress in New York” – just the way as we are communicating between ourselves.
13. Churn Prediction
The ability of AI to analyze more data sets will also help retailers learn about the customer’s intention to stop being a buyer or brand follower. And not only the absence of purchases for a long time will be taken into account – the amount of data that will be analyzed for such a conclusion will be much larger.
There is a great hope that retail brands will become more ethical and eco-friendly with the help of AI. However, regardless of which side we will look at these retail opportunities that will become a reality in 2020, the most important task that the AI can help solve is completely different.
The best thing that AI can do for brands (especially for clothing manufacturers) is to help optimize production in such a way as to make it maximally ethical and environmentally friendly. There are high hopes that in 2020 more brands will pay attention to this opportunity.
The fact is that 2020 can become the best year ever to implement AI and ML solutions to your retail business.
Why? The answer lies on the surface. Artificial intelligence and machine learning are fairly new technologies, but not so new that only global giants like Amazon can afford to invest in their development. Today, the cost of introducing AI into business processes is becoming adequate and relatively affordable – most medium-sized businesses can afford it.
Moreover, the past few years have been a time for testing AI in action. At the moment, many AI and MO vendors already have great experience working with different companies and solving different tasks that require AI integration.