March 5, 2020
Artificial Intelligence Is Transforming Retail Operations
Artificial intelligence is not just a hot retail trend for 2020 and beyond – it’s a trend on fire. More than 83 percent of major retailers surveyed say that AI is a strategic priority for their operations, while 84 percent say that AI will help them sustain a competitive advantage.
It’s clear that AI is the future, already spanning every aspect of the retail industry, with phenomenal growth in the past four years. The worldwide AI and machine learning market was valued at $1.58 billion in 2017 and is projected to grow to at least $30.6 billion in the next four years – a compound annual growth rate of more than 44 percent.
What It Means
AI is already used in cash management, pricing, logistics and delivery, warehouse management, sales and customer relations, manufacturing, and credit card payments. The numbers and predictions for AI are impressive, but how do they translate to improved retail operations?
The top five uses for machine learning in companies with more than 10,000 employees are: Reducing company costs, process automation for internal organization, improving the customer experience in stores and online, generating customer insights in order to influence store design, and detecting fraud.
Better Customer Service
AI enables improved customer service through cash management by solving problems and increasing visibility across the business by automating processes. This leaves associates more time to focus on improving customer experience as well as eliminating the risk of avoidable errors by streamlining processes and freeing teams from time-consuming administrative tasks to focus on high-value activities that improve organization performance.
Building Loyalty with AI
Loblaw, a Canadian supermarket chain with 2,000 stores, is working on a multi-year transformation in digital payments and shopper loyalty and rewards with AI as the key driver. The company uses AI to offer a seamless shopping experience online and in the store – a winning combination that consumers increasingly demand.
Early results are encouraging. In the first year of its PC Optimum rewards program, Loblaw enrolled 18 million members. Consumers can take advantage of exclusive events and unique offers based on their shopping history. The program is designed to reward loyal shoppers and build additional foot traffic.
No Magic Formula
An effective AI strategy and implementation will require hard work and a shift in organizational mindset, but retailers have an opportunity now to invest in automation and AI at scale to deliver a better experience and cost savings. Current technology and automated solutions make it possible for retailers to make data-driven decisions without the need of a total organizational overhaul or major financial investment.
It’s clear that the future of retail will be more automated and focused on the individual. As this shift takes place, customer experience will become less chaotic and stressful. While implementing AI in retail can seem overwhelming, retailers have tools and options available to find the right end-to-end solution that simplifies decision making across the organization.
Next blog post in our series about key trends will cover the human element in retailing. Meanwhile, see how Cash Process Automation helps retailers use data to their advantage in order to focus on what matters most – their customers.