Retailers today are faced with mounting pressure to maximize their bottom lines while maintaining cost expectations for consumers. But amid volatile market changes, ever-evolving customer expectations and increased competition online, this is increasingly challenging to realize.
Enter artificial intelligence (AI). Many retailers are turning to AI to help boost productivity while keeping costs in check. Research finds the global market size for AI in retail is expected to grow drastically, from $4.84 billion in 2021 to $31.18 billion in 2028. This sharp increase is attributed to surging demand for AI-powered retail solutions as the industry continues to undergo digital transformation.
As AI adoption in retail soars, it’s critical to understand how to leverage it effectively and what benefits you can reap if AI-powered solutions are implemented strategically. Here are the top four areas where you can apply AI to drive business growth.
1. Competitive pricing.
Competitive pricing is a key strategy to build customer loyalty and increase sales. By using AI to calculate prices based on market demand and other market conditions, you can ensure that you’re offering the best value to your customers. In addition, you can use this data to compare your prices with those of your competitors to identify potential opportunities for growth. With a better understanding of your customer demographics, you will be able to price your products more effectively, and respond to changing market conditions quickly so you can make data-driven decisions that will benefit your business in the long run.
2. Demand forecasting and merchandise planning.
AI-enabled forecasting can help minimize the risk of unexpected stockouts so that you can provide a better customer experience and meet the demands of your customers more effectively. With better visibility of your inventory levels, you can make more informed purchasing decisions and avoid overstocking or running out of key products in your warehouse. This can help you to reduce excess inventory costs and wastage of valuable resources while increasing your profitability.
Additionally, by implementing an AI-powered forecasting solution, you can increase your operational efficiency and enhance customer satisfaction by proactively managing your supply chain while reducing waste and costs across your operations.
3. Customer support.
Good customer service is critical to building a loyal customer base and increasing sales. By applying machine learning to your contact center, you can provide better support to your customers and resolve issues faster so they can get assistance when they need it most.
AI technologies can analyze patterns of customer conversations and identify trends in their requests so agents can quickly respond to their needs without having to repeat basic information. Additionally, some bots can be programmed to provide proactive customer support, which can help to reduce the number of calls that your team receives throughout the day. As more customers use chatbots to get answers to their questions, your customer service team will be more productive and equipped to handle more queries effectively.
AI technology can help streamline internal processes and boost employee productivity by automating routine tasks and eliminating human errors. As a result, companies can expect to see decreased operating costs and increased profits over time, resulting in higher returns on their investments.
With AI solutions integrated into the workplace, retailers can enjoy the benefits of increased workforce productivity and reduced operational costs while also enabling employees to focus on delivering a superior customer experience.
Start Realizing the Benefits of AI
As AI decision support systems are deployed, there are additional benefits that retailers can enjoy, including:
• Reduced Overtime Costs: When repetitive processes or procedures can be automated using AI, the workload on your human resources team can be reduced. The less time that your workers spend performing manual tasks and responding to emails, the more time they can spend on strategic activities that have a positive impact on your bottom line.
• Improved Quality and Productivity: Because AI-powered tools are designed to enhance efficiency and accuracy, they can improve your brand’s productivity and the quality of its products and services. Employees who use intelligent automation software can produce better work in less time because they have more time to focus on value-added activities. This leads to greater customer satisfaction, better retention rates for your business and an improved reputation for your brand.
• Enhanced Customer Experience: By integrating AI technology into your customer service operations, you can improve the efficiency of your call centers and give your agents the tools they need to provide high-quality service. This can help improve customer loyalty and help you stand out from competitors.
• More Informed Decision-Making: Collecting and analyzing customer data is an essential step in the development of effective marketing campaigns and targeted product promotions. Using AI-powered tools to gather data from multiple channels will help you identify market trends and customer preferences so you can optimize your offerings and improve your marketing strategy over time.
• Increased Employee Satisfaction: According to a recent survey by Gallup, employee satisfaction is an increasingly important metric for employers. AI-powered solutions can help retailers boost employee satisfaction by providing reliable, consistent support and streamlining their workflows so they can spend more time on high-priority projects and less on routine administrative duties.
By using AI, you can improve your competitive pricing, increase forecasting, deliver exceptional customer service and collect and use customer insights to drive business growth. With so many benefits attributed to AI, retailers risk getting left behind if they aren’t leveraging these advanced solutions.
To boost your bottom line — particularly during times of uncertainty — it’s critical to strategically deploy AI-powered technology.
Kevin Sterneckert is Chief Strategy Officer for DemandTec by Acoustic, where he develops strategies that unlock new value and competitive opportunities for retailers and manufacturers. With over 35 years of retail technology industry experience, including extensive hands-on pricing and merchandising experience at HEB, Walmart and others, he combines forward-looking industry insights with the pragmatic grounding of a seasoned practitioner. Prior to joining DemandTec by Acoustic, Sterneckert held a range of executive leadership roles at Symphony RetailAI, JDA (now Blue Yonder), Predictix and Oracle, as well as serving several years as Gartner’s Research VP and Lead Analyst for the Consumer Value Chain.