We’ve all heard the terms “big data,” “Internet of Things,” and “artificial intelligence” making their way into business over the past few years. But as 2018 approaches, these technologies continue to become even more prominent. What’s more, they’re opening new doors for companies when it comes to customer interactions.
The key internal capabilities needed to ensure a successful digital shopping experience are personalization, automation and the unique identification of the customer across shopping channels.
Personalization: AI enables retailers to provide a personalized approach to each customer through a customization of shopping recommendations, e-commerce and m-commerce portals layout and promotions.
Customer service: AI is used to operate chatbots that mimic the client’s interaction with a sales associate or a customer-care assistant. The technology is able to detect the tone of the user’s messages and understand what is the best way of responding to the client’s need.
Inventory management: Retailers can predict what customers are likely to buy in the near future, thanks to data analytics powered by AI. This enables retailers to maximize the probability of having the right items in stock as the customers order them, which results in faster fulfillment and leaner inventory operations.
Retailers and Tech Firms Collaborate to Apply AI
Amazon, Shop Direct, and Otto Group are among the retailers using AI. In this section, we profile selected examples of how retailers are collaborating with tech companies to implement AI solutions for the three aforementioned applications in personalization, customer service, and inventory management.
Intelligent Personal Assistance: Amazon Echo and Alexa
Amazon Echo is one of the best-known applications of AI by a retailer. Amazon Echo is a small device with an embedded microphone that connects the user to Amazon’s AI-powered intelligent personal assistant Alexa. The device enables the user to receive information and services by voice command.
Amazon Echo is also another channel through which the user can buy products on Amazon’s marketplace. Users of the Amazon Echo device can ask Alexa to shop for products, but only those users with Prime memberships can buy directly through the virtual assistant via voice commands. Customers who are not Prime members are limited to adding items to their online baskets through Alexa.
Voice shopping is likely to work particularly well for replenishment purchases of lower-value, everyday items. Consumers typically buy food products, toiletries, and household-care goods by brand, so do not need to see the product before they check out. Alexa should, therefore, help Amazon build share in groceries.
Retail Personalization: Sentient Technologies and Cosabella, Mad Street Den and Vue.ai
Cosabella: Lingerie firm Cosabella collaborated with tech company Sentient Technologies to deploy AI on its website. Cosabella uses an AI-powered algorithm to test alternative options for its website design based on the conversion rate generated by each variant. Traditionally, this process would have been carried out with A/B testing, which is quite time-consuming. The optimization of website design through AI resulted in a 30% increase in conversion rate.
Sentient Technologies: Sentient uses AI to help retailers increase m-commerce conversion rates. The tech firm developed a mobile-friendly interface that encourages shoppers to interact by highlighting which products they like and do not like. The service learns from this information and uses it to recommend only the products that match each customer’s style, in the same way, a store associate could do in a brick-and-mortar store. This creates a more engaging and simpler way of shopping with a smartphone.
Vue.ai: Another AI-powered service is offered by Vue.ai, a sub-brand of Indian tech startup Mad Street Den. The AI technology behind Vue.ai enables retailers to personalize the website based on individual shoppers’ preferences. The technology learns from shoppers’ browsing and shopping histories and displays items that match their preferences and provides personalized shopping recommendations.
The New Reality
While the promise of AI is not yet fully realized, the IoT is becoming more commonplace, and with new technologies emerging all the time, the potential for continually improving field service operations is limitless. Once technologies become increasingly integrated into existing support channels, this will not only free up employees to focus on other tasks but also create new ways to delight and retain customers.