Artificial intelligence (AI) application in the retail industry improves a brand’s customer service. With AI, brands design shopping experiences both more convenient and more personalized for consumers. A study by Apptus found 52% of fashion retailers plan to invest in AI applications during the next year with 19% planning to join the trend next year. How exactly can retailers use AI technology to enhance how consumers interact with their products?
In the online space, social networks like Pinterest and Google woo customers with photos of products. Retailers like Amazon have taken notice by designing image-forward shopping platform, but Amazon is not the only retailer working with visuals. Neiman Marcus pioneered a mobile app called Snap.Find.Shop that allows users to take photos of items in store and view similar items in the online inventory. Ebay’s new visual search feature allows users to upload a photo to find matching listings on its website. Crave’s visual shopping app also locates similar clothing items all based on a photo. Applying visual search AI technology improves the shopping experience and increases the chances of a closed sale. Consumers can receive alternative suggestions, compose entire outfits with in-stock items, or price compare without typing any search terms.
Messaging applications are trending across all industries, including retail. We expect messaging’s use to rise as more of the base audience becomes accustomed to using chats to field queries. They deliver personalized services by responding to customer service complaints, questions, and basic queries like, “What time does your store open?” With AI, the chatbot’s response can be, “We open at noon. Shall I book an appointment for you?” Besides answering customer questions, smart chatbots deliver recommendations. See Tommy Hilfiger, who launched a chatbot in conjunction with NY Fashion Week. Their bot created a personalized experience by delivering fashion styling advice or browsing their latest collection.
Pair AI with predictive analytics to better understand customer decision-making. In the real world, retailers can monitor consumer behavior, activities, online data, and more. The AI understands how consumers move through a store. If two complementary products are placed close together, will they buy both? Applying AI lets retailers tailor decisions on demographic data. A clothing retailer obviously knows during winter not to stock flip-flops in New York or thick puffy coats in Florida, but with AI, stores can better tailor what to stock on a hyper-local level. AI also knows what to offer an online customer. Think of online retailer Amazon and their “recommended for you” section which offers product recommendations based on a customer’s buying behavior. This AI is adding value to the shopping experience by suggesting related services they may actually need.
Apple X made waves when it revealed the facial recognition unlock feature. Some technology experts and media sources wondered if facial recognition went too far, considering recent major breaches of personal data. AI applications can help prevent fraud. One out of 10 shoppers has abandoned an e-shopping cart due to fraud concerns. AI can evaluate transactions, spotting inconsistencies in real-time to stop the buy before it happens.
As evidenced, AI applications bolster customer confidence in their purchasing decisions. With chatbots and visual search, retailers streamline their customer service. AI technology further allows retailers to make informed decisions about store layout and product placement, essential when opening a new location.