Tomasz Woźniak
CEO
Artificial Intelligence is no longer an exciting trend, it is being implemented in the retail industry in impressively robust ways. Numerous companies have already transformed how they operate and engage with customers, cutting costs, discovering new revenue streams, and optimizing margins.
That’s why I decided to highlight the most impactful and practical applications of AI in retail today: how you can use it to drive innovation, enhance customer satisfaction, and boost profitability.
Enjoy the article and, if you’re curious to learn more, download our “Real-World Applications of AI in Retail” ebook to access an extended version with real-life examples from both Future Mind’s and other companies’ AI implementations.
AI has taken sales forecasting to the next level. Making it possible to leverage large amounts of historical sales data, market trends, and customer behavior insights to predict future sales with remarkable accuracy, it has allowed businesses to optimize inventory levels, preventing overstock and stockouts.
If your business maintains brick-and-mortar locations, analyzing in-store customer behavior through the use of computer vision is another method you can use to generate additional data points, enhancing forecasting precision. For price management, AI can dynamically adjust prices in real time based on demand fluctuations, competitive actions, and market conditions.
A great way to strengthen both of these processes is to use local data for tweaking decisions in specific markets. For example, atypical weather conditions in a location can impact an apparel retailer's decisions both in terms of stocking and dynamic pricing. AI can also be leveraged to optimize promotions for low-rotation goods and items with short shelf lives, ensuring they are sold before expiration, and thus maximizing revenue and profitability.
AI-powered tools for real-time competitive analysis are revolutionizing how businesses keep track of and respond to their rivals.
New solutions enable continuous, real-time monitoring of competitors' activities, including SEO and PPC efforts, link monitoring, traffic data, and search phrases, all that at a highly granular and precise level.
Businesses can track UX/UI changes and new features on competitor websites and mobile applications with no human effort involved, staying informed about their user experience enhancements. AI can also monitor the availability of specific products and sizes, giving insights into rival companies’ stock levels.
Advertising campaigns across various formats, media types, and lengths of impressions can be analyzed to gauge competitors' marketing strategies. And, in the meanwhile, AI tools can also continuously examine the expansion of brick-and-mortar stores and customer traffic, providing a comprehensive view of competitors' market presence and consumer engagement.
AI is enabling increasingly powerful supply chain optimization in retail by streamlining various aspects of logistics and operations.
Transport route planning, including the crucial last mile, is now more efficient with AI's ability to analyze traffic patterns and predict delays, ensuring timely deliveries. Automation also extends to business relationships with suppliers, where AI facilitates seamless transactions and inventory management.
In warehouses, AI-driven planning tools determine space requirements and optimize human resource allocation, enhancing operational efficiency. The dynamic data exchange between supply chain stages ensures real-time visibility and coordination, reducing bottlenecks.
Additionally, micro fulfillment centers equipped with robotic systems are revolutionizing logistics, enabling quicker, more accurate order processing. These advancements illustrate how AI can drive significant improvements in retail supply chain management, from enhancing delivery accuracy to optimizing warehouse operations.
AI can also be extremely useful for both online and offline loss prevention, offering sophisticated solutions to enhance security and efficiency.
In physical stores, AI integrated with surveillance cameras helps prevent theft and detect dangerous situations by analyzing real-time footage and identifying suspicious behavior. Computer vision technology further aids by collecting anonymized data on shopping behavior, providing insights without compromising privacy. Meanwhile, automated cash registers equipped with computer vision streamline checkouts, reducing human error and fraud.
Online, AI monitors the availability of critical points such as oAuth and payment gateways, ensuring a seamless shopping experience. Another, still fairly unknown application of AI is that of enhancing the quality of images and video content while optimizing CDN usage, thus both lowering costs and improving user experience.
Generative AI tools have been discussed at least a hundred times by every media outlet just over the previous year, but they are not to be ignored. Their popularity doesn’t change anything about their potential for automating and enhancing numerous tasks, driving both efficiency and innovation.
Solutions driven by Gen AI excel in creating diverse marketing content, from compelling ad copy to engaging social media posts, tailored to target audiences. On the office backend, they streamline desk research and presentation creation, providing data-driven insights and visually appealing formats with minimal manual effort.
For e-commerce, they can ensure product sheets and descriptions are automatically updated, guaranteeing accuracy and consistency across platforms. AI can also prepare detailed product specifications, including size, composition, and materials.
Managers can find AI helpful thanks to its power of identifying business risks and recommending crisis actions. Management dashboards powered by AI bring order to low-quality data, organizing it into coherent, automated reports that facilitate informed decision-making.
AI can be a boon for employee management, offering tailored solutions for both field and in-store operations.
AI-driven tools are extremely efficient at creating and sequencing tasks for employees in stores, logistics centers, and on the field, ensuring optimal productivity like in Żabka stores that use the Żabka Asystent app or at D-Marin’s marinas. Dynamic onboarding and personalized training plans can also help new hires quickly adapt to their roles, enhancing their effectiveness from the start.
Self-audits, facilitated by AI, allow employees and facilities to maintain high standards without involving direct supervision. Meanwhile, provided adequate equipment is available, solutions based on computer vision can verify planograms, ensuring accurate shelf displays without manual checks. Additionally, AI tools can gather and organize internal knowledge, making it easily accessible for employees, thus both fostering a well-informed and agile workforce and generating substantial time savings.
AI tools can bring value to customer service processes in retail by providing comprehensive support for both end customers and internal processes.
By training your own AI-driven chat models based on historical data generated by your employees’ interactions with customers, you can automate basic interactions while ensuring accurate, natural, contextual responses. It’s a great way to support customer service representatives from start to finish, as well as support them in finding answers to internal queries, enhancing overall efficiency.
AI can not only improve customer service workers’ productivity, but also their comfort and mental well-being. SoftBank recently made the news with their new “emotion canceling” AI tool that reacts to aggressive customers by transforming their loud, offensive speech into softer communication. This type of technology can stand between customers and service providers, allowing both parties to express their emotions without affecting the other side of the conversation.
AI’s audio and video analysis capability can also allow it to segment customers at each stage of their journey based on their mood and sentiment, enabling personalized interactions and tailored support. By matching agents to the appropriate stage of a customer conversation, AI optimizes the service experience. Additionally, integrating business functions into conversational interfaces can simplify processes and improve accessibility, making customer service more seamless and intuitive.
While the importance of custom development and expert software engineers still cannot be overstated, AI tools can definitely make analysing and creating digital products more efficient and accessible.
Low and no code platforms enable businesses to analyze digital products and create basic ones without extensive programming knowledge, accelerating development timelines. AI can now autonomously generate user interfaces, adapting them seamlessly to different channels and screen types, ensuring a consistent user experience.
Meanwhile, for more complex projects, co-pilot tools can enhance productivity and reduce errors by assisting developers in their work, suggesting code and design improvements in real-time.
AI tools can also automate the creation of design documentation, ensuring that all project details are accurately recorded and easily accessible. Additionally, it makes it possible to analyze the efficiency of digital product development-related processes, identifying areas for improvement and optimizing resource allocation.
AI has clearly been redefining personalization for years, offering consumers a more tailored shopping experience. As Gen AI and big data analytics become cheaper and more accessible, this process is only speeding up now.
Granular segmentation allows retailers to predict customer needs and preferences at every stage of the purchase path with ever-increasing accuracy. High-quality cameras combined with cloud-based recommendation engines provide personalized product suggestions and identify similar items, enhancing the shopping experience. LIDAR scanners take this a step further by enabling augmented reality features, such as visualizing furniture in a room with precise measurements, reducing the likelihood of returns due to size or color mismatches.
AI also personalizes promotions and communications, automating them to reach customers at the most opportune moments based on their behavior. By analyzing vast amounts of input data, retailers can deliver highly relevant and timely content, driving customer satisfaction and loyalty. Especially in the context of mobile applications, dynamic interfaces powered by EDGE AI can adjust in real-time to user behavior and preferences, providing a personalized experience.
AI-powered personal assistants are a hugely effective extension of the tech advancements I described above. AI tools can tag and categorize hundreds of thousands of products for easier search and discovery, helping other algorithms recommend the best purchase options or provide inspiration that aligns with customer interests and preferences.
Additionally, AI assistants can automate communications, providing timely updates and support based on customer interactions. These tools bring significant business benefits, including increased sales, improved customer satisfaction, and reduced operational costs.
I have definitely failed to mention all the possible applications of AI in retail. Indeed, it would be impossible not to fail, as new, innovative solutions and ideas for the future emerge every week, which is exactly what makes the current moment of AI development so impactful. But what I won’t fail to mention are these three actions you need to take if you want your relationship with AI to bring genuine results.
Once you’re done with the three points above… May your AI implementations shock you with their positive impact!
K. Szmaj - Head of Analysis
P. Wasilewski - Head of Solutions
K. Borowiec - Business Development Manager
E. Waszkowski - Head of Strategy
