Artificial Intelligence in Retail - Part 3


In part 1 and part 2 of the article, we identified the use of Artificial Intelligence in Retail industry and provided some examples of how AI is helping some of the big brands in Retail industry. In this part, let us discuss some use cases where AI will be useful in reshaping the way Retail industry works.

AI technologies have been integrated into retail and marketing by using big data analytics to develop customer-specific profiles and their anticipated buying habits. Knowing and forecasting consumer’s demand across interconnected supply chains is more important than ever, and AI technology is expected as an essential component.

Here are a few use cases  of using Artificial Intelligence in the retail industry:

AI Is the New Personal Salesperson

Retailers can use AI to discover new sources of revenue to improve performance, as well as to identify and execute strategies for successful customer relationship management (CRM). AI automates the repetitive sales activities, acts as a virtual assistant, segments customers dynamically and supports customized offerings.

Sales assistant AI technology such as Coversica engages in direct conversation with customers and boosts their interactions with the retailer. For example, the New England–based car dealer, Boch Automotive, claims to have improved Toyota car sales at its dealership by using such technology.

Customers’ Prospecting and Retention

AI software has been deemed to be able to do everything from discovering leads to managing customers shopping experiences. All in all, the role of AI in sales involves the detection of opportunities in sales and the finding of which customers are ready to buy. Uniqlo clothing store, for example, is exploring the use of technology and AI to create a different experience in the shop. Selected stores have UMood kiosks powered by AI that display a variety of products to customers and measure their style and colour reaction through neurotransmitters. 

Customer Service and Payment Management

AI can be handy for customer service. Even big retailers such as Starbucks and Lowe’s are using AI to boost customer experience. In this regard, most retailers are looking for voice- and text-based AI that can analyze customers’ attitude towards buying a particular product and service. 

AI has made significant progress in the area of payments as well. AI not only makes transactions faster but also dissuades fraud. To proactively identify and avoid payment fraud, PayPal’s AI uses a deep learning system based on years of digital transactions. The implementation of AI in automated self-checkout systems has been considered as the most innovative improvement to existing processes for self-checkout. A notable example is Amazon, with its model of the Amazon Go store. 

Media Optimisation

AI is changing how retailers are managing their interaction with digital media. An Australian online gift store named RedBalloon uses an AI-powered platform called Albert to offer personal experiences. Albert is engaging markets, mixing and matching creative resources, purchasing advertising and running campaigns across both paid and free media channels, including YouTube, Facebook and Google. RedBalloon reported an increase in Facebook conversion rates of around 750 percent and a return on its marketing investment of around 1,500 percent.

Inventory Optimisation

AI is also used to determine how many products of each commodity should be stored in various warehouses depending on the local warehouse, season, area and major cities. Then accordingly, AI adjusts the quantities of optimal stock. The start-up company ‘Tally’ built a retail trade robot with AI that manages shelves entirely automatically. The machine continuously scans for empty spaces and items that are wrongly placed and travels automatically through the shops. 

Likewise, H&M is using AI to keep stock of popular items. The brand uses AI to analyze receipts from the sale and returns to determine each store’s transactions. The algorithm lets the store know which products are required in certain places to promote and sell more. The data might find that floral skirts in urban stores sell well and change inventory to match what customers want. 

Walmart announced the Intelligent Retail Lab as its store of the future. Instead of utilizing the smart technology to track sales and products, Walmart’s program monitors inventory rates to warn employees when shelves need to be restocked or when fresh goods need to be pulled or sat too long. Likewise, Mediamarkt and Ikea have introduced the informative touch-screen displays in large shopping centres and departmental stores to identify as well as search for items in the stores across all of their sales points in Europe.

Logistics, Transportation and Delivery Management

AI has already changed the way the retail industry is doing logistics and transportation. Some of AI’s exciting new developments include self-driving vehicles, robot deliveries, intelligent route planning and drones. Dominos, for instance, works with robots to distribute food and drinks while retaining these products at the proper temperature. Amazon has operated drones and is reviewing drone laws around the world in order to make drone shipments routine soon. 

AI systems can track and improve all logistics operations interactively along with the product attributes (shape, size and weight); plus order demand variables can be considered during the formulation of logistics strategy. AI is used to handle last-minute changes for delivery and shipping. It involves choosing the best option port if the initially planned port is blocked, calculating arrival time and assessing a carrier’s likelihood of cancelling a contract.

In summary, AI-based applications are reshaping the way shoppers choose channels, select services, and products, as well as make purchases. AI-based Innovations are set to assist the customers in making the right decisions, feeling less time pressure and increasing confidence as well as satisfaction with their choices. Retailers have no choice but to embrace the emerging innovations in order to defend their competitiveness. AI is not assumed to replace humans.


  1. Your articles are really amazing! It’s like watching an episode of “Back To The Future”, but it’s a present reality. We are living in a futuristic AI-world. Now we know that the industry is well past its nascent stage through your article 👏

    1. Glad you like it. People like you give me inspiration to keep writing on these topics. Thank you.


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