There are so few sleeps before Christmas… yet, there’s so much to do.
Thankfully, retailers have some powerful new helpers: AI agents. These aren’t your typical elves; they are autonomous systems who can help transform the holiday shopping experience.
Introducing AI agents: Your autonomous retail buddy
So, who or what exactly are AI agents?
And no, when we say AI agents, we’re not talking about Agent Smith, the iconic antagonist from The Matrix, tasked with maintaining order in a simulated world by eradicating anything that disrupts the status quo.
Our AI agents in retail couldn’t be more different. Instead of hunting for rule breakers, they’re hunting for opportunities to help the customer (and the retailer).
AI agents can manage customers’ shopping lists, track price changes, alert customers to deals, and even provide personalised gift recommendations, whether the customer is buying for themselves or others.
AI agents are autonomous systems, constantly running, making decisions, and taking actions to achieve specific goals – all without human intervention.
They’re set to offer personalised shopping experiences that will make this festive season more effortless and even a little bit magical.
And 2024 will be the year where retailers globally start to adopt AI at scale. They’ll do this to transform the shopping landscape and, most importantly, excite and delight the increasingly fickle and dollar-conscious consumer.
AI-powered retail solutions to spread festive cheer
While the full potential is AI agents is still unfolding, retailers can leverage AI-powered solutions to get ahead this festive season:
- AI-powered personalised gift recommendations
Retailers are using AI algorithms to delve into past purchases and search histories to craft personalised wish lists, offering gift ideas that are uniquely tailored to each shopper’s preferences.
One standout example comes from Etsy’s AI-powered service that helps curate personalised gift ideas for its consumers. This AI-driven feature not only offers convenience, but it also enhances the shopping experience and helps businesses differentiate themselves in a competitive retail market.
2. AI-led marketing strategies
As the holiday shopping season ramps up, retailers could be turning to AI to cut through the clutter in their marketing communications.
By testing various phrases and writing styles in electronic direct mails, companies can significantly increase open rates and engagement.
For example, luxury fashion retailer, Farfetch, leveraged AI-technology for real-time language optimisation in its campaigns that increased email opens by a whopping 31.3%.
Get ready for AI agents, your digital elves
As AI adoption continues to surge, the technology itself is far from stagnant. The next big thing in AI is set to be AI agents.
With ChatGPT’s confirmed launch of its AI agents next year and Gartner predicting that 33% of enterprise software applications will include agentic AI by 2028, AI agents are set to transform the technology landscape.
AI agents excel at two core functions.
AI agents can autonomously perform complex tasks by breaking them down into smaller steps – a process known as agentic workflows, make decisions and interact with various systems – like a digital personal assistant.
Then they engage in back-and-forth conversations to refine results and produce the best outcome for the use case. This capability is also known as iterative prompting.
For example, Fujitsu’s newly launched Fujitsu Kozuchi AI agent exemplifies these core functions, acting as a collaborative team member that enhances decision-making and streamlines workflows, offering businesses data-driven insights to thrive in a competitive market.
Unlock the potential of AI agents: Elven magic for retailers
From a retail lens, AI agents will optimise and improve the end-to-end retail journey, benefitting both retailers and customers.
As the cost of living continues to be top of mind for shoppers, AI agents can optimise value and prices to deliver maximum savings.
AI agents are poised to transform the retail experience by quickly evaluating prices and value offerings from multiple retailers, engaging in real-time price negotiations, considering customer’s loyalty, market dynamics, and the retailer’s stock levels, to get the best possible deals for customers.
Your AI checklist for retail success
To leverage the new era of AI agents and maximise its potential applications on future festive seasons, Australian retailers could follow these steps:
- Develop robust data infrastructure: A centralised data management system is key. Real-time data synchronisation ensures that AI can provide accurate and timely recommendations, which is why investing in quality data processes is so crucial to success. Think of this as the elves’ workshop, meticulously organised for maximum efficiency.
- Enhance digital product information: Prioritise effective product descriptions and rich media content, such as using semantic markup that improves AI accessibility and enhances search visibility on your retail platforms. This helps the elves quickly find and present the perfect product to the customer.
- Implement advanced pricing and inventory systems: Embrace real-time inventory tracking and dynamic pricing strategies to meet the soaring consumer expectations for instant updates. No more elf-sized stockouts!
- Build a comprehensive API ecosystem: Develop a suite of APIs for core functions like pricing, inventory, and customer data to ensure seamless integration with cutting-edge AI platforms. How else can elves communicate amongst themselves?
- Invest in AI and machine learning capabilities: Whether building in-house expertise or forming partnerships, invest in AI solutions tailored to your business.
- Take a proactive approach to ethical AI: Define clear principles and develop privacy policies that align with the company’s values and social expectations. In addition, you should continuously monitor and evaluate governance processes to adapt to the ever evolving legal and regulatory landscape. You don’t want rogue elves acting like Agent Smith, do you?
Prepare for the future of retail this holiday season
AI agents will redefine the retail landscape in 2025, and for Australian retailers the time to act is now. Those who stay ahead of the curve and lay the foundations for the application of AI solutions today will be best positioned to succeed during future holiday seasons.
With the holiday season fast approaching, retailers should deck the aisles with new technologies and data-driven insights, to deliver a personalised shopping experience that jingles all the way through the busiest times of the year.
Mahesh Krishnan is chief technology officer for Oceania at Fujitsu.