Impact of Artificial Intelligence On Retail Industry

The retail industry is in a constant state of transformation. The retailers are attempting to survive the fierce competition in the market and fast-changing customer shopping habits.

Retail business owners are investing in cutting-edge technologies, including Artificial Intelligence (AI), robotics, data analytics, and logistics automation, becoming more customer-centric and responsive to demands in the industry.

Impact of Artificial Intelligence On Retail IndustryAmong these advanced technologies, AI has a significant impact on almost every operation within a retail business. By 2020, retailers are expected to spend $7.3 billion annually on Artificial Intelligence technology.

With the help of artificial intelligence and machine learning, retailers can transform store infrastructure and boost traditional business processes. According to a recent market study by Capgemini, if retailers deployed AI across their retail processes, they could save more than $340 billion by 2020.

Soon, brick-and-mortar retail stores will function more like the online store with the deployment of these technologies. Let’s see now how AI will revolutionize the retail industry operations.

Behavior Analytics and Forecasting

AI technology is believed to be crucial for retail business decision-makers. Using this technology can help retailers to figure out their customers’ demands and needs, which will make them more customer-centric.

With the help of data acquired through the AI-driven analytics platform, retailers can make well-informed business decisions about the quantity of stock to be ordered based on the customers’ behavior. It will not only increase efficiency but also save time and money for the company.

Using AI algorithms, retail businesses can run targeted marketing campaigns based on customers’ region, preferences, gender, and purchasing habits. It will help in improving customer loyalty and retention as a personalized experience is a great way to show them care.

Digital Racks and Smart Shelves

Artificial Intelligence is changing the way that customers used to shop and looked forthe right things in the store. Now, with the digital racks, it is easy to find the right items, product information, and style recommendations based on their preferences.

These digital racks with the smart gesture screens will not help to enhance the customer experience but will also allow customers to choose from a variety of options that may not be available inside the store due to space constraints.

Nowadays, shelves in departmental stores are not just surfaces for putting and displaying the products now. Smart shelves are being introduced with which the customers can interact using technologies like proximity sensors, 3D cameras, microphones, and RFID. It is redefining the whole process of retail shopping.

Virtual Trial Rooms and Smart Mirrors

While shopping and trying out the products in-store or shopping online, customers are often confused about how it would look, which can be quite frustrating and clumsy. To ease up the trying out process, retail brands have come up with the concept of virtual trial rooms, which are based on AI technology.

Virtual trial rooms are equipped with smart digital mirrors where customers can try the products without having actually to change again and again. Using a gesture and touch interface, customers can mix and match the items to finalize the look in no time.

These trial rooms are not just perfect only for the apparel brands, but the cosmetic and beauty companies can also deploy them so that their customers can try the beauty products without actually applying them on their skin.

Robotic Assistance

Robotic assistance is rapidly becoming the first customer touchpoint in retail stores. However, Robots are already involved in the warehouses of various big sharks in the retail industry like inside Amazon’s warehouse in New Jersey, the U.S. It is very common to find beetle-like robots moving around with vertical shelves stacked on them.

With AI, robotics can drive innovation and helps in boosting the retail processes from logistics and supply chain to store operations, merchandising sales, and marketing. They can be strategized for enhancing the customer experience, which includes self-checkouts, self-service scanning, mobile shopping, and pre-order & payments.

Moreover, retail robots are configured and deployed in such a way that it makes the work easier for employees and owners. They can sell things, monitor inventory levels, help customers to find items, and also welcome the customers with customer journeys.

Many retailers now seek logistics consultants’ expertise to navigate this transformation and optimize technology use in logistics and warehousing. These specialists focus on refining supply chain operations, integrating robotics and AI into distribution networks, and enhancing inventory management. Working with logistics consultants proves invaluable, helping retailers align these advancements with their strategies and meet evolving customer expectations.


Chatbots are the artificial intelligence programs intended to connect with customers via chats, text-or-voice based conversations. AI-driven chatbots enable retail businesses to engage and support their customers efficiently.

With the help of these chatbots, retailers are now able to handle a large number of queries whether in-store, or customers facing problems on the online store, or even before stepping a foot in the store. They are configured to answer queries, recommend products, and provide support promptly.

Also, some AI conversational platforms capture the data and provide analytics regarding customers’ buying habits and interests in products. Hence, when customers get personalized attention and prompt support, they tend to get attached and loyal to the brand.

To Wrap Up

From creating more jobs in the market to enhanced and more personalized customer experiences, it would not be wrong to say that Artificial Intelligence is the future of the retail industry.

Although predictive analysis is not a new concept to retailers but in the last few years, with the advancements in technologies, retail brands are now able to value those analytics and use it for the better growth of their business. The AI-enabled retail world helps consumers to feel more connected, mobile, social, and open the doors to a large number of choices.

About Julie Watson

Julie is a dynamic professional with over 16 years of rich experience as a VDI and Application Hosting expert. At Ace Cloud Hosting, she humanizes disruptive and emerging remote working trends to help leaders discover new and better possibilities for digital transformation and innovation by using cloud solutions with an enterprise-class security approach. Beyond work, Julie is a passionate surfer.
On the weekend, you will find her hanging out with her family or surfing around the North Shore of Oahu.

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