In the ever-evolving retail landscape, where consumer expectations are evolving at the pace of the advancing technology that supports it, competition is fiercer than ever.
This means staying ahead requires more than just keeping up – it demands innovation.
The spotlight is on how retailers are leveraging technology, particularly AI, to enhance customer experiences and meet soaring consumer expectations, writes Anna Clymo, Retail Principal at leading UK tech consultancy BJSS.
AI: The ultimate game changer
AI is no longer a futuristic concept; it’s a present-day reality transforming our everyday lives. From personalised shopping experiences to efficient supply chain management, AI is revolutionising how retailers operate. AI-driven systems that analyse data, automate processes, and enable more personalised and efficient retail experiences are not just enhancing customer satisfaction but also driving significant economic value, with estimates suggesting that generative AI alone could create somewhere in the region of $240 billion and $390 billion for retailers if implemented correctly.
Personalisation is King
In a world where product options are endless, retailers have to work even harder to engage customers, and a key way to do this is to make their shopping experience personal to them. From the adverts that pop up on their social media feeds, to targeted recommendations and bespoke discounts online, to memorable in-store shopping experiences – this is all where AI comes in.
For example, Tesco is exploring its use of generative AI within the Clubcard loyalty scheme to provide product recommendations and personalise how customers shop. This is a great example of how retailers can harness the data they already collect to improve customer experiences, drive sales and increase market share.
Reimagining the customer experience
Outside of grocery stores, H&M is setting an example with its latest store concept, offering improved omnichannel services. Customers will be able to access interactive fitting rooms where screens recognise products and provide tailored styling tips. Through the screens, shoppers can request a new colour or size as well as recommended garments directly to the fitting room or on the H&M website. Additionally, customers can complete their purchase from anywhere on the shop floor through both mobile checkout and self-service checkouts. Not only does this keep the customer in-store for longer, but it also leaves the shopper with a lasting reminder of the brand, increasing the likelihood of return and conversion.
One of my favourite innovations over the past year has to be improved product discovery through visual search. AI-enabled visual search allows customers to find products by uploading images online. For example, Zara’s mobile app lets you take a photo of an item, search for it, and then purchase it digitally. This innovation could equally be applied to grocery to bolster the search capability and provide recommendations on alternative products if the item is not stocked at that store.
Putting the AI in Sustainability
Consumers are not only looking for a shopping experience that works for them, but they also want their purchase choices to work for the world around them.
As eco-consciousness rises, retailers are under pressure to showcase their sustainability efforts. And AI can play a crucial role here, specifically by enabling predictive and proactive carbon management processes and solutions.
For example, AI can optimise transportation routes to reduce carbon emissions, as seen with Walmart’s Route Optimization software, which uses algorithms to create efficient delivery and pickup routes. It factors in traffic, delivery times, vehicle capacities, and customer locations to minimise driving time, emissions, and fuel consumption.
Additionally, AI-driven demand forecasting helps retailers manage inventory more effectively, reducing waste and ensuring that products are available when and where they are needed.
Retailers like Curry’s and Asda here in the UK are offering financial incentives, such as shop vouchers, for recycling and reusing old products in-store, contributing to a lower carbon footprint for both retailers.
Not tech for tech sakes
Data and AI is paving the way for a new era of shopping, revolutionising the way we interact with brands and utilise our purchasing power. But the IT infrastructure, implementation and strategy must be tailored to both the retailer and audience alike – there is not one silver bullet, and each organisation is at a different stage in its tech optimisation journey.
Similarly, the importance of continuous innovation and adaptation cannot be overstated. By learning from leaders within and outside their sector, retailers can implement best practices that focus on long-term metrics. And we mustn’t forget the importance of in-store staff, who continue to be a critical touchpoint valued by many. In fact, the in-person experience with a store employee can be a deciding factor for many when choosing where to shop, especially in the particularly competitive grocery retail landscape. Therefore, in-store employees must be knowledgeable, approachable, and empowered by technology to support customers effectively.
In this dynamic environment, the key to success lies in mastering omni-channel strategies, leveraging AI to enhance customer engagement, and committing to sustainability. As we move forward, retailers must embrace these changes to create a more engaging, efficient, and sustainable future for the industry
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