According to the Consumer Technology Association, AI has a lot of benefits in the retail sector from the consumer experience, minimized cost, enhanced productivity, faster resolution of business problems, quicker delivery of products and services. 

The increased AI implementation has rapidly made its way into many advanced solutions, including smart bots, autonomous vehicles, advanced predictive analytics, in the retail space. These factors are expected to improve customer analytics and behavior experience raising the significance of product optimization.

After researching more than 200 retail business leaders, it has been discovered how “smart technology-enabled consumer” will shop in the future. And the global professional services firm forecast that bots are going to be the superstar of the retail market. 

A report by Capgemini analyzed that retailers can save up to $340 billion annually by 2022. Another report stated that unleashing AI across the retail business processes will offer multi-billion-dollar opportunities.

What AI has to offer for the Brick and Mortar Stores

“In a digitized world, e-commerce players get detailed insights into their customers’ wishes and behavior and are often ahead of the game. However, brick-and-mortar retailers were mostly not able to gain comparable information until now – although this is highly relevant to better understand their customers and improve the shopping experience in their stores.” – Olaf Koch, CEO at Metro A

Till now, AI has only been present in the high-street supermarkets, such as Zara and Boots in the form of self-service checkouts. In fact, Amazon Go stores have been rumored to be implementing AI in terms of sensors, cameras, and applications that will eliminate the need for manual checkouts. But, there is a demand to balance the AI-powered system with human interaction. This is the reason that the Morrisons chain has re-designed their self-service cashier checkouts with a human cashier for small baskets because the brand had realized that their organization and customers weren’t fully ready to experience self-service shopping points. 

Of the top 250 global retailers are integrating AI into their organizations – 25%.

“AI has opened a world of possibilities for physical retail. The next few years will see continued enhancements to both customer experience and operations, especially with developments in checkout-free technology.”  Frank Beard, Convenience Store, and Retail Analyst, GasBuddy

Currently, AI is proving to be more beneficial in the operations part. In a lot of brands, intelligent bots have been equipped in their warehouses to cut down the time, cost, and errors. 

“Expected growth for AI robot markets between 2017 and 2023 – 28.8%”


Additionally, cameras combined with AI can help track inventory. If there is any kind of shortage, the technology can send alerts to the concerned department to restock the products. 

“We use AI all the time for our algorithms, we are constantly learning what customers put in their baskets to understand what products are popular.” – Clodagh Moriarty, Director of Online at Sainsbury

3 Ways How AI Is Being Harnessed In The Retail Industry’s Business Processes

1. Sales and CRM 

The essence of AI-enabled CRM has helped a lot in customer relationship management in terms of understanding your customers and predict their behavior. CRM connected AI system has facilitated automated responses to handle basic customer queries, reducing issue escalations, in turn, improving the overall customer experience. 

CRM gathered customer data that has helped in creating marketing plans that can tremendously shorten the sales cycle and automate a lot of marketing aspects. Additionally, Business Intelligence and analytics backed to track down inventory, insights, develop marketing promotions, monitor performances, and make faster and data-based decisions. 

Artificial intelligence-based CRM is important especially in today’s highly competitive market where the customers expect the brand to know about them.

2. Consumer Experience

AI has already revolutionized how brands are reaching out to their customers, gathering data on their purchases, and smoothing the purchase process for them. 

Consumer personalization is a way how AI is empowering the retail industry and creating a relevant shopping experience for them through chatbots, conversational interfaces, virtual mirrors, gesture recognition, and a lot more. 

“AI is revolutionizing the retail industry by making it cost-effective to deliver a completely personalized, immersive and optimized experience for every individual consumer at massive scale.” – Daniel Druker, CMO, Instart

  • Chatbots – Chatbots help companies in engaging with their customers 24/7 and personalize their buying experience. 
  • Conversational Interfaces – Interfaces like Google Home and Amazon Echo,  help users perform an activity just by voice command. AI’s technology like natural language processing allows the customers to look for products, help solve their queries, or even make a purchase online just by voice command. 
  • Virtual Mirrors – Virtual Mirrors allow consumers to try on clothes in real-time. It allows the user to find the right product that suits them without really putting-on the product. In short, it enables consumers to experience real-life clothes on their accurate virtual models in motion.
  • Gesture Recognition – It allows you to personalize the shopping experience by capturing gestures. These gestures are translated into commands, so shoppers can find the exact items that they are looking for.

Retailers need to personalize their customer’s experience in order to meet their expectations. And this can only be achieved when the brand completely knows who they are selling to and what their requirements are.

3. Forecasting 

Retailers are using AI and machine learning to predict the demand forecast to understand the actual market in the upcoming time. Not only AI will predict with accuracy, but it will also increase operational efficiency, saving both time and capital. 

Artificial Intelligence is currently being used to aggregate and automate the cleaning and segregation of the data. This makes it easier for retailers to anticipate even the slightest shifts in the demand that can be a challenge for the organization. 

The use of AI in forecasting can help produce a lot of benefits starting with improved supplies, no product shortage, overstocking, and less wastage. It also improves planning, making it possible for all the retailers to optimize their storage space and their capacity to stock products. 

The retail industry’s landscape is evolving a  lot and the business leaders are not fearing in experimenting with the new technology innovations. In fact, 49%

of leaders invest 5–10% of their IT budgets in AI.


 All the industry wants is to be relevant and in-trend with the changing consumer and this is the reason that they are experimenting with Artificial Intelligence. 

As the technology is capable of figuring and further predicting what the consumer would want before they think, AI has a lot of scope in changing and enhancing the business processes.