With Big Data Analytics and Artificial Intelligence tools, the retail industry is changing its approaches to various facets of its operation. While the big brands are the leaders in trying out many innovative technologies, even small retail businesses are investing in these to reap the potential benefits.
Big Data and AI
Big Data enables business organizations to gain deeper insights into customer behaviour, their preferences and expectations, competitor strategies. Retailers can better understand product movement and merchandise assortment needs. They can optimize pricing dynamically depending on various elements using price optimization software.
Artificial Intelligence integrates many technologies like voice recognition, machine learning, IoT, robotics etc., to provide an enhanced customer experience.
Big Data Analytics
Big Data Analytics enables retail firms to gather data from varying sources and mine them to extract nuggets of information. These can then help them gain better perspectives on various aspects of their operations like product assortment, pricing, marketing strategies, customer experience, etc.
Big Data technologies can help analyze historical behaviour data, trends, specific customer preferences and their shopping patterns, identify high potential customers, and those who can become good future prospects.
All these can help retailers design more personalized experiences for customers – for instance, knowing which product to promote to different customers, directing their attention to new products from their favorite brands or favorite product categories, offering special discounts etc.
Analyzing product movement in your own stores across channels, studying competitor strategies, market trends and so on can help retailers make better product stocking decisions. They help improve merchandise assortment plans and inventory management.
Here too, customer decisions, market trends and prices etc can be analyzed and better pricing decisions can be made in different segments – low price, good quality at competitive price, and premium brands and products with higher prices. There will be different segments of customers for each of these. Price optimization software can analyze relevant data and provide better insights for designing better and more dynamic pricing plans.
It can help retailers design better pricing, balance low prices and good quality products, design promotional offers, seasonal pricing, offer special discounts and customer specific special offers. They offer a lot more functions, helping you stay competitive in the current market scenario, by coming up with pricing strategies that work best for your business model and your customers.
These are just some aspects of the business that big data technologies can help optimize. You can use these technologies to change and streamline other functions like supply chain management, delivery systems etc.
Artificial Intelligence Applications
Advances in voice and visual recognition, machine learning algorithms, robotics, interactive technologies, faster communication technologies have all resulted in many innovative AI applications that can be used successfully in retail.
Robotics: Humanoid robots that greet customers personally and provide assistance
Virtual Reality and Augmented Reality (AR/VR): Virtual mirrors enable customers in high-end fashion outlets to see themselves in many different garments and different accessory combinations without needing to actually change their clothes.
Chatbots: Log on to your favorite shop and start chatting with virtual assistants. These can be used in many ways, as sales assistants, as assistants who can help resolve issues etc. These advanced systems can combine machine learning and voice recognition to provide tailored service.
Dynamic Catalogs: Digital catalogs that ask questions and generates personalized listings that are the best fits for your needs.
Virtual Assistants for Online Shopping: IBM Watson Websphere technology is being used in many ecommerce sites. For instance, 1800-Flowers.com has used it to implement a system which helps customers make the best gift choices. The virtual assistant does this by getting some information from the customer on what he wants, then matching it to gifts bought by other customers with similar preferences. This helps the system to come up with the best recommendations.
No Checkout Shopping: Amazon Go, an experimental technology, enables customers to shop in physical stores without ever having to stand in checkout queues. Using customer ID, cameras, motion sensors and visual processing, these shops track customers, identify the products they put into their baskets, calculate the prices and charges their card for their total purchase when they step out of the store.
These and more Big Data and AI applications are now remodeling the retail business, changing the way they serve customers and manage their business.