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Whether it’s job automation or secret languages, artificial intelligence (AI) has been the talk of many digital, security, and employment circles. But how does AI influence the retail industry?
A new whitepaper from internet service provider Plusnet tackles just that. The whitepaper, How the future of the internet will influence retail, explores some of the ways AI will shape retail, including the changes in our home shopping habits and the drive for more personalization when targeting customers.
Personalization
AI will allow retailers and the marketers behind retail brands to offer a greater level of personalization. AI takes the legwork out of creating unique purchasing experiences for customers, and can help give advertising messages laser focus.
Al Allaway of CAB Studios predicts that AI will allow a greater level of personalization: “All of the data about us being recorded in the cloud will be used to make predictions about our behaviors, from the movies we love to the types of food we would like next week. It will be used to drive targeted advertising to us. Think "Minority Report," where Tom Cruise’s eyes are used to target ads to him.”
Real-Life Retailer Destinations
While AI tech will inevitably have a significant impact on e-commerce, brick-and-mortar destinations will also be able to exploit the potential behind the technology.
Industry experts like Amit Sharma have weighed in on the subject: “Retailers will need to program brick-and-mortar experiences with the same targeting and personalization they offer online. Think about walking past Nordstrom and receiving a notification for an offer on a new pair of sneakers. Your current pair is worn down from running almost 500 miles — all logged by a chip in the sole that sends data to your fitness app. You swipe the notification to select the styles you want to try on, and an in-store map guides you to an associate waiting with your shoes.”
The AI of self-driving cars will actually make it easier for consumers to visit retail stores, as retail technology brand CEO Michael Lewis explores: “Teens will be able to go to malls because self-driving cars can take them there. This means more foot traffic for retailers that are operating more efficiently and squeezing more revenue out of their margins.”
Intelligent Marketing
AI can help retailers pick through the clues left by internet browsers and mobile users more efficiently, allowing brands to target advertising more closely. Machine learning programs can understand the intent of a user and the emotion behind a search query or a browsing journey.
When it comes to marketing, the next level in AI is the ability for machines to comprehend images. Logan Rosenstein of NVIDIA explores an interesting example of this kind of AI: “If someone posts a picture of a car fire in the NVIDIA parking lot, the system can pull the image in, identify a fire on our property (based on post location data), and alert our on-site security to respond.” This kind of technology could be used to market everyday items, with AI understanding the content and context of Instagram and Facebook image posts.
Automated Shopping
AI inside the home will also take some purchasing decisions out of consumers’ hands entirely, automatically making orders based on need.
For example, in interconnected homes filled with Internet of Things technology, a smart washer may reorder the detergent you use when its data indicates you’re running low. We’ve already seen similar tech pop up with the Amazon Dash button, and the onset of intelligent shopping could lead to our houses making buying decisions without us lifting a finger.
Ultimately, AI will be a paradigm-shifting force across retail. Improved efficiency, reduced manual work for marketers, and a more intelligent, refined psychical shopping experience will be the key benefits. However, there are some barriers. Smaller retailers may struggle to fully utilize the potential of AI, creating a greater disparity between the retail giants and SMBs, at least until AI is readily available to the mass market.
Karl Young is a marketing manager at Plusnet, an internet service provider.
Related story: 3 Ways Artificial Intelligence is Transforming Retail as We Know it
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