• AI
  • Artificial Intelligence
  • Computer Vision
  • Machine learning

How AI in Retail and Ecommerce Boosts Customer Service & Employee Productivity

Vahan Zakaryan
11 May 2022
6 min
How AI in Retail and Ecommerce Boosts Customer Service & Employee Productivity

Machine learning technologies and artificial intelligence (AI) are steadily integrating into our day-to-day life. From AI in retail sector — chatbots that offer 24/7 customer support and IKEA’s augmented reality app that allows you to place true-to-scale digital models of IKEA products in your home with a smartphone — to implementation of AI across all other industries, these solutions are already essential for the world. 

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    AI and ML markets are projected to hit over $38.4 billion and $96.7 billion with compound annual growth rates (CAGR) of 39.18% and 43.8% by 2025, respectively. Being relatively new, these markets showcase some of the most incredible growth in terms of yearly revenue. For comparison, the entertainment and media market is expected to have only an 8.9% CAGR by 2030. A few questions may arise: 

    • What is so special about AI and machine learning?
    • What are the chief spheres of business that AI and machine learning can be useful for?
    • What are the benefits AI and machine learning can bring to businesses?
    How AI in Retail and Ecommerce Boosts Customer Service & Employee Productivity - photo 1

    In this article, we’ll talk about the most popular use cases of AI in retail 2022 and how it can bring financial benefits to your business venture. Let’s get into AI trends that shape e-commerce standards in 2022.

    AI-powered personalized recommendation engine

    Statistics show that 71% of users won’t even read an email if it’s not personalized. Furthermore, businesses report that personalized campaigns increased their mail revenue by 760%. With machine learning, e-commerce and retail companies promote relevant products to customers, based on their interests, searches, and purchase history. By presenting consumers with personalized recommendations, businesses create unique experiences and increase customer satisfaction. 

    Autocomplete and search suggestions are primary examples of machine learning implementation. Specifically tailored to the preferences of each customer and their search history, such algorithms make it easier for visitors to find a service or product they need, cutting off the time spent on browsing through irrelevant options.

    Talking about finding what you need — chatbots are an excellent example of AI-powered tech. They help customers buy what they need with no need for staff to get involved. Chatbots offer 24/7 support to users that have questions and help generate insights on customers’ pain points and ways of communication for businesses. Businesses also install chatbots to cut costs of hiring customer support specialists on night shifts and paying them.

    Another example of AI-based personalized search is North Face’s implementation of cognitive computing technology. The company uses it to ask customers questions about what they’ll do and where they’ll wear the coat. Based on customers’ responses, the algorithm creates personalized recommendations to help them find the perfect coat.  

    Warehouse automation 

    A quick audit of goods provided by AI in retail supply chain and warehouses identifies pricing errors and out-of-stock items. In massive warehouses like Amazon’s, it can take a long time to notice if a product has been sold out. An AI-based inventory management system uses smart shelves that alert staff about shortages of goods or misplaced items in the inventory. 

    Furthermore, kiosks extension for shelves lets visitors see all products available in the retail network’s warehouses, which is essential if some products are out-of-stock in the location a consumer came to shop in. It’s great for increasing customer satisfaction: not finding something they want to buy is in the second place of big frustrations for them. 

    Virtual dressing rooms

    There are virtual fitting rooms for jewelry, sneakers, glasses, and even bras. AR solutions like virtual try-on for rings use AI and machine learning techniques, so the ring you choose is perfectly placed onto your finger. Apparel brands like Old Navy, Levis, Brooks Brother, and Gap already use AI scanners — with virtual try-on rooms, they’ve managed to increase their online sales by 33%

    Some applications like IKEA’s Place app enable customers to see how furniture from the shop will look in their apartments via AR. Customers aim their camera to where they want to place the table, and AI calculates whether the table’s legs will fit right. They also select a color or material and can try different options.

    Visual search, identification, and classification

    How AI in Retail and Ecommerce Boosts Customer Service & Employee Productivity - photo 2

    The digital technology implementation requires time, financial resources, and abandoning an old-fashioned way of working. However, the pros of taking a modern approach will almost always outweigh the cons in the long run. Every retailer can find a solution to boost customer loyalty, increase employees’ productivity, and grow brand awareness with so many digital technologies to choose from. Here are some examples of cutting-edge use cases of AI in retail sector:  

    • Streamlined check-outs. You’ve probably heard of Just Walk Out technology pioneered by Amazon Go stores. This technology combines computer vision, sensor fusion, beacons, and deep learning. It enables customers to make purchases without interacting with cashiers. The AI-powered technology recognizes the presence of customers in the store and automatically adds goods to their virtual shopping carts as customers take them from the shelves. Then it scans goods and takes money for their purchase as they leave the store. The biggest advantage of this technology is the elimination of queues and the necessity to hire cashiers and buy and maintain cash registers.  
    • Real-time tracking. Tracking technology allows you to view the location of your goods at any time. It reduces the risk of losing items from your order during delivery. With real-time tracking, supply chain management is more efficient. It identifies delays and other bottlenecks within the system much faster. From book shops and post offices to restaurants and public transportation companies, — this technology is beneficial to many.
    • Visual search. AI-powered visual search systems allow customers to upload images and find similar products based on their shape and color. Companies like American Eagle already use this technology. It helps their customers find similar clothes on the website by uploading a picture of the ones they would like to buy.
    • Visual inspection. Applications like Google Lens show the product’s characteristics when a user points the camera at it. IBM’s visual inspection technology utilizes deep learning algorithms that differentiate parts of a product and detects defects during the manufacturing, which helps workers notice if something’s wrong quicker.  

    AI-driven mood detection 

    How AI in Retail and Ecommerce Boosts Customer Service & Employee Productivity - photo 3

    High-tech solutions like service robots that interact with customers and AI technology that recognize speech and gestures can revolutionize the retail and e-commerce market. Robots can help customers minimize contact with objects and other people. When almost 3.8 million get infected, and over 10 thousand people die from COVID-19 daily, AI-based solutions can help eliminate human contact and reduce the spread of the disease. 

    By using speech and image recognition systems, robots learn how to detect and interpret smile, angry, sad, or happy changes in voice. Machines with this kind of emotional intelligence can understand cognitive and emotive channels of human communication. For instance, Walmart uses AI-powered cameras that scan people’s faces to recognize shoplifters. The cameras also can detect aggravation and instantly notify the security. 

    The final word 

    New AI and machine learning solutions constantly appear on the market. Retail and e-commerce giants such as Amazon, IKEA, Walmart, and GAP are already implementing them in their 2022 shopping cycles. E-commerce and retail markets are highly competitive. If you want your business to survive this high-tech competition — 2022 is the year to make a change. Our company provides custom AI software development services to fulfill your business needs. To stay on the verge of innovation, contact us.

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