Artificial intelligence (AI) has developed rapidly in recent years. Retailers are leading the way in using AI to optimize their business: intelligent machines are now commonly used to search volumes of data in seconds, engage with customers, learn from their behavior and recommend the products consumers want. Here is our pick of the most exciting innovations that are transforming this fast-moving industry.
As every retailer knows, consumers often have a clear picture of what they are looking for – but they find it difficult to describe it. Now retailers are investing in visual search capabilities that use images to help customers find the items they desire. In 2017, eBay launched two visual search features that enable app users to search for listed items by sharing a photo from any social platform or web browser, or using their own photo of the item they want to buy. UK retailer John Lewis’s ‘find similar’ function works along the same lines, using a visual search of the inventory to display items with similar colors, shapes and details. Visual search is ideally suited to retail, where images play such an important role in growing sales. In addition to customer searches, this intelligent technology could be used to recommend similar substitutes for an item that is out of stock, or to boost cross-selling opportunities by displaying suggested accessories to complement the main purchase.
Most of us have engaged with a chatbot while shopping, sometimes without even knowing it. These automated, intelligent assistants began by answering simple questions, leaving human operatives free to handle more complex customer requests. But the ability to learn has meant that chatbots are now so sophisticated they can handle increasingly complex tasks such as providing personalized product recommendations. A good example is denim retailer Levi’s Virtual Stylist. This chatbot platform acts as a virtual stylist, helping shoppers find the perfect pair of jeans based on their preferred fit, rise, stretch and wash. The machine even uses the size customers wear in other brands to find the best match. Fast fashion giant H&M has been experimenting with chatbots for a while. The bot in their Kik messaging app uses both written questions and photo options to help users create a personal taste profile, which is then used to show recommended outfits that can be bought straight in the app. The ability of chatbots to recognize and use natural language means they can interact with users in a conversational, human-like way through a variety of platforms such as mobile apps, social media and messaging apps.
Voice assistants such as Alexa, Cortana, Google Assistant and Siri have become a part of the family for many consumers, being present in their homes and on their mobile devices. This intelligent technology has changed the way people interact with their devices, and retailers have been quick to see its potential for enhancing the customer experience. Voice ordering works well for supermarkets such as Tesco in the UK, whose customers can now ask Google Home and Alexa to add products to their online shopping basket. The apps search for the customer’s favorite brand or pack size before adding it, and if a delivery slot has already been booked, they will amend and check out the order. Starbucks recently rolled out voice recognition ordering in South Korea, extending its mobile order-and-pay technology by integrating with Samsung’s intelligent AI chatbot, Bixby. Customers can use their phone in a conversational way – as if they were talking to a member of staff – to order a drink that suits their taste. The AI-powered voice ordering trend is certain to grow as the self-learning capabilities of voice assistants become more sophisticated.
In-store shopping is being transformed by robot assistants that combine the intelligence and communication capabilities of virtual assistants with a physical presence. Robot assistants can offer an experience that is both futuristic and warm thanks to their ability to recognize customers and greet them personally, provide general information, and answer questions about products. They can also recommend products based on the customer’s age, gender and mood as well as on personal preferences, if the customer shares their profile and purchase history. Perhaps the most famous automated assistant is Pepper, a humanoid robot that can interact with customers and perceive human emotions. Today’s robot assistants have some limitations, but retailers like Carrefour are already successfully using them to engage with customers and enrich the shopping experience. As the capabilities of these intelligent assistants continue to develop, robots working alongside human staff could become a common sight in stores of the future.
Personalization has become central to a great shopping experience. Consumers expect retailers to know their tastes and to provide the products they want, where and when they want them. To do that, retailers need to follow each customer’s preferences and be ready to provide personalized recommendations. AI makes that possible by constantly analyzing masses of customer data to provide accurate, up-to-the-minute insights. The most innovative retailers have begun using AI-enabled recommendation solutions to analyze shopping behavior and deliver predictive insights that enable the sales team and the e-commerce site to offer relevant product ideas and recommendations. A great example is Apple retailer Humac in Denmark. They implemented LS Recommend, an AI recommendation service that suggests items the customer might need. The system even checks that the extra items have not already been added to the customer’s basket before making a suggestion! In the first three months of use in Humac, sales of recommended items led to total margin growth of 46 percent, while customers’ basket size grew, and return visits to buy forgotten accessories fell. These are just a few of the ways that today’s innovative retailers are using AI to create rich, personalized shopping experiences. These forward-thinking retailers are forging ahead with new ideas that put the customer at the center of the business. As AI and machine learning continue to develop, we can look forward to more exciting developments over the next few years. In the meanwhile, you too can be one of the retailers that, like Humac, are offering tomorrow’s experience today. Want to know how LS Recommend can help you grow your basket size and deliver innovative experiences? Contact us today.