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MARKETING THE IMPACT OF ARTIFICIAL INTELLIGENCE ON RETAIL Analysts are predicting that global spending on artificial intelligence in retail will grow to more than US$5 billion a year by 2022. ABy Shop You founder and CEO Kelly Slessor I is a game changer for retail. We’ve been talking about its opportunities for some time, but during Covid we’ve seen an acceleration of AI use cases. Put simply, AI is the ability for machines to take large amounts of data, analyse it, organise it, then make decisions or solve problems in a similar way to the human brain. The opportunity for retailers is to use AI to improve systems and processes, reduce costs and increase revenue. Ultimately, the biggest return will be where AI can be applied to improve the customer experience. There are many use cases proving that AI can enhance the customer experience and increases sales. Understanding customer intent, sentiment and purchase behaviour and being able to map relevant products to customers is one of the keys to Amazon’s success. Guided selling and personalisation support the customer journey. It’s no secret that up to 30 per cent of Amazon sales are generated from personalised recommendations. AI has been applied across multiple areas in the payments ecosystem, from fraud to payment processing. In an environment where Covid has forced us to rethink the implications of queueing and give customers a greater degree of speed and convenience, the growth of contactless payments will be huge and Amazon Go-type technology will continue to evolve and be deployed across organisations. Chat bots have evolved since they first came to market around 10 years ago. With the market set to grow 30 per cent by 2025, it’s a clear opportunity for retailers to connect and engage with customers. Initially, these services have been robot-like in their communication style. The evolution is the ability for chatbots to learn and understand emotion and context, which in turn will provide a better experience for customers. AI in product development allows retailers to use data to inform merchandising and product development decisions. Being able to take large amounts of data sets and understand, before developing or manufacturing a product, what product features customers require reduces the potential cost of failure. One of the most frustrating experiences for customers is the search process. Often customers search for products and too often fail to find what they’re looking for. This can be due to products not being adequately described and tagged correctly. For some retailers with large catalogues, this requires significant investment. Visual recognition tools, which can automate this process, allow retailers to produce more accurate results. With four out of five retail searches starting on Google, it’s also one of the biggest opportunities. Huge benefits and cost savings are to be gained from the utilisation of AI in inventory management. The opportunity is in the ability to optimise and predict future demand, the price customers are willing to pay, and tracking inventory in real time. According to Australia Post, 5.2 million Australians shopped online in April this year, an increase of 31 per cent compared with April 2019. This resulted in a big increase in the number of packages being delivered Choosing logistics companies using AI for optimal routing will drive costs down and allow retailers to offer more competitive shipping rates. Shipping costs are the number one reason for cart abandonment. Digital customer experience services company Dynamic Yield estimates that US$18 billion in revenue is lost per year as a result of customers abandoning their cart. Although some may argue that AI could result in job losses and are concerned about its overall impact, two important opportunities presented by AI provide a win for the customer and ultimately drive traffic, conversions and sales. One is freeing up store staff to focus on the customer experience. The other is driving a better customer experience in the online channels. About Kelly Slessor Kelly Slessor is the founder and CEO of Shop You, a personalised virtual shopping mall. She has driven digital growth and innovation in retail for more than 20 years. Kelly has worked with hundreds of retailers and property groups globally to develop their digital strategies and drive higher conversions through connection. For more information, visit shopyou.com.au. 102 RETAIL WORLD NOV, 2020