In 2016, the size of the retail AI market was less than US$1 billion. By 2025, it’s projected to grow to over US$27 billion. AI is undoubtedly going to become a dominant tool in retail — the question is, how soon will the retail sector feel this change and how deeply will it be impacted?
Of course, in many cases it isn’t a matter of waiting for AI to change retail — it’s already happening. Many stores rely on this sort of technology, and some big advances in AI have even reached maturity. But moving forward, retailers can expect the speed and scale of these changes will accelerate rapidly.
To make the most of AI, it’s important to understand where the technology is now and where it’s headed. Expect these advances to affect both retail strategies and consumer expectations.
Where we are today
The most prevalent form of AI currently used in retail is the chatbot. These AI-enabled assistants provide 24/7 customer service or personalized recommendations, all without adding to staffing costs. Dashboard analytics is another form of AI that’s become ubiquitous. Retailers are increasingly collecting data under a single umbrella, then using automated tools to extract insights and prepare forecasts. Finding products is also getting easier for consumers thanks to natural language processing, which is less rigid than traditional sets of search terms. Finally, many retailers are using AI to profile consumers and personalize their shopping experience.
Not only does AI already play a role in today’s retail, but it’s something that many brands heavily rely on, regardless of their size or market segment.
Where we’ll go this decade
There are a number of AI applications that are well on their way from theory to reality. For instance, drone delivery has long been speculated about, but thanks to smarter technologies and stronger drones, it’s finally becoming feasible. Once automation is able to handle home delivery, retailers have a myriad of new ways to connect with consumers — and the automated vehicle revolution will only further impact things.
The stores of the near future are also likely to eliminate the checkout aisle. Amazon GO has pioneered this concept by using AI to track what people carry out of the store, then charging them automatically. Perhaps more importantly, AI is a huge asset for fraud detection and data protection. Cybersecurity is a mounting concern in retail, but AI can effectively eliminate risk and reduce vulnerability.
What lies beyond
The rise of AI has been so fast-paced so far that it’s hard to imagine where it will be in 20+ years. Smart technologies and vast amounts of data will blur the lines between channels and put the consumer in complete control of the experience. Expect personalization to improve in similar ways. We are currently able to make educated guesses about customers, but future AI will enable far more granular understanding. Retailers will be able to truly curate experiences in a way that is unimaginable now. Whether next-generation stores are staffed by robots or not, AI will undoubtedly continue to play a significant role in the evolution of retail.
Some retailers view AI as an expensive and complex realm of technology, but those poised to succeed view it as a beneficial extension of their existing staff and capabilities. AI is able to handle routine tasks and ongoing workflows so retailers can focus on their customers first and foremost; an opportunity that both parties should anticipate with excitement.
AI is just one of the many exciting developments in tech that is taking hold in the retail sphere in 2018. Want to stay on top of the trends? Subscribe to the iQmetrix newsletter, Wireless Untapped, to stay in-the-know.
Photo Credits: Shutterstock / Patryk Kosmider, Shutterstock / panuwat phimpha, Shutterstock / Zapp2Photo