AI Turbocharges the Digital Transformation of the Retail Industry

Artificial intelligence with practical, everyday applications is no longer the stuff of science fiction. AI is already being employed by thousands of businesses of all sizes today to help them do business faster and less expensively or to develop an edge over the competition.

Most people don’t think about AI when they talk about the “digital transformation” of the retail industry. The first things that come to mind for most people are robots replacing workers and the efficiencies derived from a universally available internet together with the ubiquity and sophistication of modern database systems.

But sophisticated AI systems are no longer limited to the labs of academia or high-tech giants like IBM and Google. A wide variety of purpose-built AI technologies are available today to “rent” or buy, including a growing number of “machine learning systems” that help retailers improve their operations and better understand customer behaviors in order to improve their marketing efforts.

AI Was Made to Crunch Big Data

The amount of data collected today on virtually every American consumer is staggering. Most people know that their own financial, legal, and medical service providers are collecting data on their travel, shopping, spending, dining, and entertainment habits, but many people do not realize these providers are using this data to further their own marketing efforts and also frequently sell consumer data to third parties for profit.

There are, of course, legal limits on the information that can be collected on individual consumers, as well as limits on how the data can be used or sold. But outside of the EU privacy protection for individuals is minimal. This enables businesses to use AI to analyze all of this data and glean valuable operational and marketing insights.

Most of the leading AI retail systems today were specifically designed to winnow through Big Data to identify trends and make inferences. This enables cutting-edge retailers and eCommerce companies to better map customer journeys and predict buying patterns, including cross-sells and upsells.

How AI Gives Early-Adopter Retail Businesses an Edge Over the Competition

Predictive analytics is one key area where AI is being applied today in the retail industry.

For example, IBM Watson Cognitive Computing system stores and analyzes consumers’ shopping habits, allowing it to predict future purchases as well as offer customers other related items they might need or like.

Sports apparel retailer, North Face, implemented a custom version of Watson Cognitive Computing technology, and within weeks saw a 60% increase in click-through rate and a 75% total sale conversion rate.

AI systems are also helping retailers across the country streamline their logistics and delivery systems. Most people just take the amazingly fast and cheap (or free) delivery of the goods they order for granted, but this miracle of the post-modern industrial era would not be possible without AI to accurately determine a whole slew of key metrics relating to logistics, from where to locate warehouses for the most efficient delivery to predicting customer demand for a new product.

Domino’s Pizza has spent tens of millions of dollars developing in-house artificial intelligence systems over the last few years. Besides their industry-leading delivery system, one major result of this investment is, a new mobile delivery robot with an AI brain.

DRU will constantly keep food and drinks at the right temperature until it reaches the delivery destination, and it uses scores of LIDAR and visual sensors to navigate the optimum path to the destination. Note that DRU is still in the pilot testing phase, and has not been officially launched yet (possibly in 2019).

AI is here to stay, and it’s here to help, making doing business a pleasure for all.


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