Machine learning is rapidly transforming the retail sector online and in-store, and brick-and-mortar and online retailers alike must keep up if they want a competitive edge in an increasingly competitive market, a leading expert says.
It’s AI’s ability to seamlessly collect data about consumers and use this to predict and direct future purchasing habits that makes it such a powerful tool for retailers, Dr Paul Warner, VP of Customer and Employee Experience Strategy at InMoment told Retailbiz.
“Customers are becoming much more comfortable with sharing stories and often AI able to take on nuanced emotional elements that could predict future customer behaviour.”
Retailers that can not only efficiently collect data, but develop insights about consumers from that data will thrive in the future retail market, Dr Warner says, while others will slowly phase out.
“AI is going to be the new competitive battleground simply because those brands that use it really well, they’re not only able to retain more of a customer base but they’re also able to capture larger markets, larger customer segments because they understand more about who their customers are.”
Stu Spiteri, CEO of Systema AI says it is consumer demand for an individualised experience that has given “tailwind” to these expectations – an expectation that AI technology is tailored to deliver.
“Well-conceived AI which is about the marrying of technology with the retail environment can provide for those things without the complexity of what was traditional technology,” he said.
AI is “core and critical” to customer’s online purchasing habits, Mr Spiteri says. And increasingly, AI won’t be limited to online platforms, but will in fact be more prevalent in-store.
“There’s gonna be a ratio of 10 to 1 in-store to digital because 90 per cent of revenue is in-store.”
It’s the ability for AI to understand and predict customer intentions and behaviour and to fulfil expectations before they arise that makes it such a powerful tool for retailers, Dr Warner says.
“It’s becoming more and more important and that is we’re finding that customers’ expectations are changing so quickly and those expectations are shifting away from any experience where customer themselves has to put in a cons amount of effort to either seamless, frictionless or touchless experience.”
But finding a balance between the utility of this data for customers and retailers alike and the importance of safeguarding individual privacy is critical.
“Customers want AI that will again ease the amount of effort it takes for them to complete transactions and that will make it more efficient for them but there is a balance between that kind of personalisation vs overpersonalisation that is creepy,” Dr Warner said.