Every retail business wants to stay competitive while driving innovation. Brands also want to market and advertise their new products and create impactful experiences. All that they want to achieve at a faster pace.
In order to do so, embracing new tools and technology is a must. Brands or retail organizations that have embraced Gen AI were able to stay ahead of the curve.
Accenture claims that ‘On average, 46% of working hours in retail across frontline and corporate roles could be enabled by Gen AI technology’.
User demands are unpredictable, they might like today and not like them tomorrow. Also, that goes for the businesses that you provided customers yesterday might not be available tomorrow.
Certainly, a better and more trendy product is offered to the customers to captivate and engage them.
As per the recent study by Statista, 2/3rd of retail professionals state they would consider using GenAI to recommend products for their customers.
Additionally, 60% of professionals would use generative AI for marketing campaigns (generate text, images, videos & music) to attract customers.
A study was made in the United States in 2024 about generative intelligence producing high impact in different areas. Over 50% of professionals expect impactful results with post-merger integration, data analytics, IT, employee transitions, negotiations, and much more.
AI has always proved its potential be it handling store operations or automating warehouse. It was observed that 2/3rd of the retail professionals were valued at $6.32 billion in 2022 and is expected to grow by 30.5% by 2028.
Professionals of all sectors are interested in Artificial Intelligence to empower their businesses and scale swiftly. Many big organizations like Cisco believe AI will become a strategic priority for their businesses.
There are retail software development organizations that work on educating retailers about how AI can bring improvements in their operations while offering marketing services for dealers. Educating retailers has become necessary as they are slow when it comes to integrating new technology into their operations.
Certainly, smart professionals and business owners advocate AI for saving precious time and money while performing multiple tasks. Here are the ways AI can be integrated into the retail sector.
How Can AI Be Used in Retail?
Planning To Market
Some experts believe that AI requires no assistance from an expert company or professional to manage large, expensive, and time-consuming tasks.
AI is capable of analyzing information in no time and producing excellent & captivating results. AI proves to show exceptional marketing plans with unique content, suggest the right platform and audience to engage, timelines for tasks, track performance & more.
Strategize Social Media
Social media is the fastest means to reach users. Retailers can leverage powerful AI to help them create a month’s strategy for social media. Retailers can customize posts, images, video captions, and hashtags.
Dynamic Artificial Intelligence can assist in tailoring posts retailers desire for their audience. Retailers can also specify their goals, upcoming events, and promotions content to AI for effective and captivating strategies.
Brand Voice
When you customize and get tailored solutions from AI, you get results that reflect your brand. Instead of marketing your brand with the words that everybody uses, AI can help with your brand voice.
With tailored product descriptions and messages, retailers can communicate with customers creating a genuine image. AI can simply mimic and create the tone and language that your store employees speak.
Highly Influencing
AI can create highly captivating stories that leave a lasting impact. So, retailers can leave the stressful and occupying work to AI and work on crucial aspects.
Certainly, AI is capable of inspiring humans with new and creative ideas for merchandising. It can also suggest how and which design element, color, texture, or fixtures would go best that match your store
With technology as capable and brilliant as AI, retailers, and merchandisers can leverage to reduce time, money, and workload. By understanding how to use and implement for good in their business, retailers can ensure the success of their brand with AI. With this let’s understand the key trends of AI in retail.
Also Read: AI in eCommerce – Exploring AI Use Cases In eCommerce Industry
Key Trends To Watch of Generative AI in Retail
If you are looking for new retail e-commerce solutions to provide your customers, you must be well-aware of the latest trends In AI for retail. The trends will help you create improved and exclusive results.
1. Virtual Shopping
One of the best ways to use AI is to assist customers with dilemmas. A conversational AI can sort out customers’ doubts and help them with right decisions until they are satisfied.
Gen AI can analyze the shopping preferences and needs of the customers through relevant questions. Other than shopping for apparel, customers can rely on AI for plumbing, digital networks, and cold-weather fashion.
2. Regression Testing
Generative Artificial Intelligence is a perfect example of versatility. The technology can assist when it comes to managing your PC for managing your store seamlessly.
AI can run regression tests on retailers’ PC to ensure every change works perfectly well. AI ensures that the features integrated within the store for the customer’s comfort and convenience work as expected.
3. Foundation Models
Large models for retail businesses are pre-built and trained with public data to focus on business needs from day one. However, these models are expensive and not every retailer can have them.
The best and most cost-effective way any retailer can have is by improving the output of generative AI. Gen AI can be trained with customer reviews, product catalogs and much more. They can then act as domain-specific foundation model that can enhance shopping experiences.
4. Personalization
Retailers can use Gen AI in their online stores to customize shopping for every customer. Combined with machine learning, Gen AI can customize themes, tailor assortments, curate offers, and much more based on personal preferences.
Gen AI can also help retailer enhance their sales by leveraging data analyzed of products, past sales, and third-party customers. The data can be used to offer white-glove services to average customers too.
5. Smarter Agents
Earlier chatting with a bot always seems like chatting with a machine. Generative AI is different! The new and improved humanized AI offers a helpful and assistive tone to customers.
From simple chats, Gen AI has taken things to the next level. The technology analyses the data before responding to any doubts of the customer. The AI is expected to solve complex problems without the intervention of human agents. Additionally, it can track and examine competitors’ websites, offerings, products, margins, prices, and much more for retailers to observe and create a market strategy to beat others.
AI Use Cases in Retail
To ensure consistent and continuous scalability, you as a retailer must partner with an AI development company. The company can understand your needs and provide a tailored solution that matches your brand image.
Research and Development
Artificial Intelligence can be used to protect the business and drive product innovation. With GenAI, companies can fix the inefficiency and duplicity while securing valuable resources.
AI clever virtual mind can break customer insights, which can add value to the product team to make their product more efficient and appreciated.
Merchandising
The market is highly competitive and to beat the crowd you need to provide fast and enticing products. To do so you need the assistance of advanced technology that can provide you insights into the customers’ preferences.
AI can tap into the competitive brand’s market & trends and analyze them for recommendations for future product offerings and promotions.
Certainly, with AI embedded in the business, businesses can analyze and make strategic merchandise decisions which, in turn, would improve inventory management and prevent stockouts.
Store Operations
AI can assist with the extensive education of new or beginner-level associates. The technology is well-known for stimulating customer service scenarios, which helps new associates handle demands immediately.
Additionally, for the experienced retailer, AI can provide quick answers to doubts when needed. Store associates can confidently handle topics ensuring correct information about store policies, product features, availability, and promotions.
Segment Marketing
Marketers in retail can utilize AI capabilities to personalize PDP workflows. PDP is responsible for improving sales by converting traffic into sales.
Personalized campaigns mean tailored content which means increased organic traffic, enhanced SEO, and faster scalability. Not just this, AI can seamlessly help you translate every single content to distribute and approach a worldwide audience.
The converted material can also be tailored for unique regions, keeping cultural differences in mind, to ensure compliance, relevance, and accuracy.
Customer Support
Generative AI is known to offer superior customer support. It can efficiently engage and meet customer expectations understanding their issue. GenAI is usually connected with the store information archives and hence becomes the right source to gain answers to doubts.
This kind of assistance not only increases customer satisfaction but also reduces the human load of attending to customers 24/7.
Distributing Knowledge
With all the information stored in the intel and regular processing, Gen AI has become smarter and retailers must leverage it for maintenance. With AI, retailers can reduce costs and time invested in sourcing and processing content from the market and maintain them.
Retailers with worldwide product distribution can leverage Gen AI for the most essential work – translate! To deliver a personal touch to every customer of different regions, retailers can use AI to translate and localize resources in seconds and speed up work.
Read More: AI in Education – Use Cases of Artificial Intelligence in Education
Competitive Advantage Of Using AI In Retail
No doubt Generative AI is capable in every aspect of managing and scaling business. Let’s throughout its capabilities quickly.
- Business logic within the AI algorithms helps the technology to create custom applications with every content and feature tailored.
- Retailers or professionals can always rely on outputs shared by the technology as it delivers them with consistency and swiftness.
- Professionals and marketers can always adjust the tone and style of the content to match the brand’s voice.
- Gen AI can also dive into archives and ensure that the brand meets legal, compliance, and regulatory needs and avoids any penalties.
- The best ability Gen AI has is that it can be integrated with any device. So businesses can leverage the power of this technology into their existing systems and workflows to make it impactful.
- Generative AI has strong algorithms that can protect customers as well as business valuable data. AI can encrypt and offer stringent layers to avoid any malicious activity.
- Training and assisting is one of the capabilities that AI posses. Brand employees and customers can always look up to this technology for any assistance, doubt, and knowledge.
Case Study Of Adore Me
Acquired by Victoria’s Secrets & Co., Adore Me proves to stand out of the crowd offering a wide range of lingerie and apparel. It was not just the line of apparel that stood tall in competition, but its AI-integrated feature -‘Try-on’.
Writer AI was the one behind this feature, which skyrocketed sales and offered brand recognition.
The company has not just halted its innovation with AI. It uses AI to deploy multiple custom apps, automate key processes, and save time by optimizing product descriptions.
‘Adore Me optimized 2,900 product descriptions and increased 40% non-branded search volume with Writer AI’.
The company continues to partner with Writer AI allowing the team to put efforts into creative work. The technology also allows the team to focus on the bigger picture instead of working on redundant and mundane tasks.
Learn More: Benefits of AI (Artificial Intelligence) in the Healthcare Sector
Limitations With Gen AI
Security & Privacy
Retailers should ensure that their customer data is safe. Effective training and an encrypted stringent security layer ensure that your customers’ data is safe and not interjected with unauthorized access.
Biased
Pre-built AI algorithms are designed to work on set tasks with set preferences. This may seem as biased and reflect on their results. Hence, retailers must understand and carefully adjust the AI algorithms to ensure fairness in the outcomes.
Interpretability
Every business owner using new technology must know behind the scenes. This means, the process or how the technology assesses data and delivers outcomes. Understanding the AI decision-making process can help retailers explain to their customers the outcome of any decision made by the technology.
Bridging Gap
Retailers or eCommerce businesses need to keep track of new trends and technology to entice their customers. With timely training and knowledge, companies can always fill the gap and keep their employees updated for better customer experiences. Also, updating AI is necessary for predictive maintenance to ensure retailers get the desired results.
Integration
To ensure that AI blends with the current ecosystem of the business, retailers must check if the versions are compatible. Latest technology demands updated systems to co-exist and integrate seamlessly. Hence, AI can be challenging when integrating it with old and existing systems.
If you are well-versed and understand the technology backend you can deal with the challenges seamlessly. New technology requires an updated system to integrate with, hence your system should have that. Let’s see what future lies ahead of AI in the retail industry.
Future of AI
Certainly, the future will be more reliable, efficient, and easy to manage. With time, AI will become smart and will require less training to maintain.
Gen AI will become more creative and human-like filled with cognitive abilities. The technology will understand context and emotions better to respond in the same way as humans.
It is expected that AI will have more sophisticated language models, display humor, and sarcasm, and improve contextual understanding to bond with humans better.
Along with flexible architecture, the transfer of learning will become strain-free. Additionally, the advanced and effective AI will have better anonymization techniques, decentralized AI models, and systems for stricter regulation and privacy.
Final Words
In short, the automated task processing technology, AI, will improve with time to share a more humanized touch in its responses and outcomes. The augmented human capabilities will not just enhance business, but ensure happy and satisfied long-term customers in one go.
However, retailers also need to keep themselves updated and understand the mind of an AI to better understand how the technology processes. They also would require to have maintained and updated systems to ensure that AI could integrate seamlessly and run smoothly.
FAQs: AI in Retail
Yes! Many AI solutions are now available as affordable SaaS tools that even small retailers can use for personalized marketing, chatbots, and inventory automation without massive investments.
Not entirely. AI chatbots handle routine queries, FAQs, and support tasks efficiently, but complex customer interactions still require human assistance. AI enhances, rather than replaces, human support.
AI detects unusual transaction patterns, identifies fraudulent activities, and secures payments with real-time risk analysis—protecting both businesses and customers from financial threats.
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