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How Retailers Use Artificial Intelligence to Innovate Customer Experience and Enhance Operations

Digitalization influences how businesses operate and build and maintain relationships with customers. With the internet open 24/7, consumers can save time and shop online at their convenience. In 2017, global eCommerce sales accounted for 10.2 percent of all retail sales ($2.3 trillion US). This figure is projected to reach 17.5 percent in 2021. Revenue from eCommerce sales is expected to grow to $4.88 trillion US.

eCommerce share of total retail sales worldwide from 2015 to 2021. Source: Statista

Physical stores still have the lion’s share of sales, but the growing demand for online experiences shouldn’t be ignored. To remain competitive, retailers must allow in-store customers to enjoy the benefits of online shopping. Fast checkout, personalized recommendations, or instant access to customer care at any time are a few services that can be implemented with the help of artificial intelligence.

For this article, we discussed current and potential applications of AI in retail, as well as the state of the industry in general, including factors that drive adoption of cognitive technologies. Experts from such companies as Lucidworks, Advantech, KAPUA, MindsDB, Fellow Robots, KaizenTek, Aware Corporation, XR Web, and fashion brands Hockerty and Sumissura joined the discussion.

Let’s find out how retailers invest in high tech to impress customers in physical stores and use tools to increase the efficiency and speed of their operations.

Cashierless shopping: Amazon Go, JD, Alibaba, and Lenovo

Grocery shopping continues its evolution from being social and interactive to choosing items and checking out with little to no contact with the store staff.

Customers used to chat with a counter clerk who knew the products and assembled orders. That was the only way to shop. But a new wrinkle was added with the introduction of self-serve grocery stores. The first US store of this kind – Piggly Wiggly – opened in 1916 in Memphis, Tennessee.

Self-checkout kiosks, designed and patented in the 1990s, became a popular alternative to cashier lanes in the early 2000s. Retailers aimed to free customers from wasting time in long checkout lines, letting them scan and pay themselves. Such an initiative was one of the answers to growing customer demand for a smooth shopping experience as well as being responsive to competition in the industry.

Forrester Consulting discovered that poor checkout experience and long lines are the third highest reason shoppers would skip the line and shop in a different place.

Slow checkout is the reason that 18 percent of customers would shop elsewhere. Source: Forrester Consulting

Further transformation of checkout in the name of speed and convenience is possible though the use of AI.

Amazon Go stores. In December 2016, Amazon introduced the “Just Walk Out” shopping experience with the first Amazon Go store in its Seattle office building.

A visitor armed with an opened Amazon Go app scans a QR code on a turnstile to enter a store (like at an airport to board the plane) and picks up what they need. In-store cameras and sensors detect each product taken from a shelf, as items are being added to a virtual cart while the customer proceeds. “If you change your mind about that cupcake, just put it back  ̶  our technology will update your virtual cart automatically,” explains the official video. A shopper can walk out once they’re done shopping, and their Amazon accounts will be charged automatically shortly after the visit.

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