While opening a retail establishment, your main goal is always to achieve maximum profitability. Before reaching that goal, you must understand the concept of how to operate efficiently and productively. Luckily, digital transformation in the retail sector has been going on for years and has increased efficiency, accuracy, and speed across all branches of retail businesses. The main contributor to this transformation has been advanced predictive analytics systems which have helped companies make decisions based strictly on the data provided to them by these tools which run on the principle of artificial intelligence.
According to a report by, Fortune Business Insights, the artificial intelligence market is expected to grow from $4.84 billion (in 2021) to approximately $31.18 billion in 2028, a staggering growth rate of 30.5%. So it is safe to say that this is the perfect time for you to start a retail business using AI, or add AI tools to your already established business to maximise your returns and profits.
Below are 5 ways by which artificial intelligence is changing the retail market:
- Loss Prevention: Due to the increase in competition, many retail stores are already severely strained and a shortage in inventory only negates their image in the public domain. The shortage can be caused by multiple reasons like employee theft, shoplifting, and much more. Companies are now investing in new technologies to combat this shortage of inventory using artificial intelligence. By using computer vision on POS counters, retail stores are now promoting a “self-checkout” system to reduce theft and scams. Employees will be alerted of every potential theft or incorrect billing. Ultimately, this process can save inventory and can even help in making a behavioural change.
- Market Demand Prediction: For any business, it is crucial to understand the current trends and predict future trends to adapt accordingly. With AI, retailers can utilise massive amounts of unstructured, unused data to their benefit. AI can also use real-time data to connect with the actual demographics and arrive at improved conclusions. Having the ability to learn from the past, artificial intelligence always keeps on improving the algorithm gradually.
- Supply Chain Optimisation: Artificial intelligence can be an additional employee when it comes to supply chain optimisation, the technology can predict the behaviour of your customers and can let you know right away when you will be running out of certain products. It can also let you know when will the demand for certain products be maximum throughout the year which will be helpful for a retailer as they can stock up on that particular product earlier to maximise returns.
- Better Customer Experience: By using AI and IoT, retailers have introduced the concept of Chatbots that can help a customer 24*7 with almost every query like store navigation, give recommendations, and can even suggest personalised products. If you are in the clothing industry, you can use AI to allow your customers to upload pictures of the outfits they desire and then you can offer them similar items present at your store. AI is and will revolutionalise the way customers shop at a retail store.
- Automation: It is one of the most important factors when it comes to AI transforming the retail sector, you can automate the tasks which were previously performed by workers. This gives retail stores the benefit to focus on many important tasks like solving complex customer issues. This will also indirectly improve customer satisfaction ultimately improving sales.
AI is truly changing the whole retail shopping dynamics by regularly upgrading to new technologies. With the use of AI, you can boost your profitability, and sales, enhance customer retention and can get ahead of your competition, and now is the best time to jump on the artificial intelligence bandwagon. With the correct AI tools, you will be well on your way to accomplishing a whole new level of business growth.