How Artificial Intelligence is Transforming Retail

The less virtuous possibilities of AI have been making the news a lot recently. A pair of data scientists at the security company ZeroFOX have been experimenting with an AI designed to run a phishing scam on Twitter with a degree of efficiency and effectiveness that humans just can’t achieve. While it is hardly the first time that automated Twitter accounts have caused disruptions, it may represent the first time that an AI has proven itself more capable of social manipulation than a competing human.

For hackers, AI might offer a whole world of new criminal enterprises but for those of us in legitimate business there are significant lessons to be learnt from applications of AI and machine learning that are already transforming the retail industry.

A lady shopping at a supermarket

Every organization worth its salt collects data about its customers but studies in 2016 found that 80% of the data being collected was going to waste, with the trends unanalyzed and the bigger picture of user behaviors being lost. Implemented appropriately, AI is capable of collating and analyzing so-called “dark data” to build a more complete picture of users’ needs and preferences, and tailor better experiences that lead to loyalty, increased spending and improvements in practically every metric.

Grocery retailers in particular are loving the insights that machine learning can provide to them. By tracking buying trends globally and locally, stores are now able to stock only the items that will sell within the time constraints of perishable goods and to manage their wastage more effectively.

In online retail, the use of automation is both prevalent and vital but integrating AI into physical stores is only just beginning and holds huge potential. Consider Amazon’s self-service checkouts in their unmanned San Francisco store – a first step towards a completely frictionless retail experience?

Even in after-sales care, an area that many would consider to be the most socially focused in the Retail sector, AI is now making itself useful in the form of automated or diagnostic chat-bots that can answer queries that customers might have.

The future for retail is the omni-channel experience where data is passed seamlessly between online shopping, applications and the physical store but the complexity of actively managing that sort of experience for any decent volume of users challenges human capabilities. Smart retailers are embracing AI and machine learning to handle the pressures without difficulty.

If you want to learn more about the ways that AI is revolutionizing the retail sector, you can read Sutherland latest white paper on the topic here.

Principal Design Researcher

Sutherland Labs
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