AI Having an Impact on the Shopping Experience
How AI Will Further Shift Customer Shopping Experiences
Technology has been a major disruptor in retail business as e-commerce solutions have been developed. Ecommerce sales have skyrocketed and show no signs of slowing down, while online shopping experiences become more personalized and efficient through Artificial Intelligence (AI) and Machine Learning (ML).
Meanwhile, large retail chains that failed to appropriately anticipate the impact of online shopping, along with small, local stores, have gone out of business. Between 2015 and 2019, 81 significant retail companies in the U.S. filed for bankruptcy. It is a shopping era of adapt or perish. Zoom ahead to 2020 and you will see the surviving brick and mortar stores use AI and ML to enhance customer experiences in-store and grow sales.
Industry experts like Peter Guangenti, CMO of MemSQL predicts customers will start to notice some breakthrough changes: “To an extent not seen to date, AI and ML will, so to speak, emerge from the lab and infiltrate your life.”
Part of the reason is efficiency—both in the way humans work and supply chains are managed, aided by AI and ML, and also due to our shopping behavior and expectations.
Behind the scenes
The supply chain industry has been sluggish in adopting AI and ML, causing a lack of data needed for algorithms to function efficiently. More up to date supply chains will emerge in 2020, says Jorge Rodriguez, SVP of Product Development, Cleo: “AI and ML algorithms will enable a 30,000-foot view of the supply chain and provide valuable insights to ease previously tedious processes such as product redirects, new partner and supplier onboarding, order cancellations, oversupply and more.”
Bots have gotten much more advanced, and are better able to interpret customer queries. Using natural language processing, AI can comprehend a shopper’s intent and deliver more accurate information. “With more conversations being successfully navigated by bots, brands will increase their usage in order to improve response times and drive greater contact center efficiencies,” says Ido Bornstein-HaCohen, CEO of Conversocial.
The emerging breakthrough shift in online customer interactions will be in voice commands in apps. Consumers are latching on to the ease and usefulness of doing things with voice instead of typing and tapping. As John Foster, CEO of Aiqudo explains, “Each of these (voice) queries represents a consumer intent, generally highly correlated with an action consumers want to take.” This translates to higher sales potential via transaction-oriented consumer intents. “Any consumer-focused AI platform will need to be able to collect and analyze this massive volume of high value consumer touch points represented by voice commands.”
Focusing on voice commands will be as crucial for brands as optimizing for mobile was in the past decade.
AI plays a significant role in payment fraud prevention technologies and handling massive, complex data. With financial regulations increasing to address demands of the shifting global payments landscape, AI aides in seamless customer experiences while ensuring merchant compliance.
But the world of artificial intelligence in payment processing might not be perfect. In 2020, we could see a retail or banking site go down as a result of AI making an incorrect decision. “The AI algorithm will observe unusual behavior and wrongly determine, for example, that a breach is happening,” predicts Antony Edwards, CTO of Eggplant Software. “It will then take the system offline, resulting in loss of revenue and service to customers. This incident will result in a shift back to ‘decision support’ as people become more skeptical and risk-averse.”
Consumers have not totally walked away from physical stores. Personally, I like looking at and touching products in person. AI plays an increasing role in how successful brick and mortar stores operate, including automated payment systems, robots, biometrics, product search apps and in-store navigation beacons.
Behind the scenes, apps for operating digital concierges, IoT controllers, smart building access control, operations and maintenance will emerge.
Here is a future glimpse of some of these technologies and real-life retail applications.
The same tools used on phones and in airports to identify you are being tested to analyze facial expressions as you shop so AI can deliver personalized recommendations based on the sensor’s interpretation.
High Tech Brick and Mortar
Ironically, online mammoth Amazon (that some claimed put many stores out of business) opened a physical store in 2018. The high-tech grocery store operates with virtually no human interaction from a clerk, and doesn’t require shoppers to check out. AI detects when a product is removed from its shelf, and these items are then charged to an individual’s Amazon account as they leave the store.
Home improvement retailer Lowe’s was one of the first chains to deploy robot attendants to assist customers. The LoweBot responds to voice commands, guiding customers through the aisles with smart laser sensors. This addresses the growing consumer demand for instant information.
In early 2020, Walmart introduced thousands of robots to its workforce to help manage inventory, scrub floors, and keep product shelves in order.
Big box retailers are also using a variety of wayfinding applications to help customers navigate inside the store. Apps for businesses like Walmart’s Sam’s Club, Home Depot, Lowe’s and Target help customers determine if a product is in stock, locates it in the store, then maps the route to the product for a more efficient shopping experience. Let’s face it, nobody wants to waste time looking for products or trying to find a human associate.
Target took a novel approach to store navigation by replacing overhead lighting with energy efficient LED’s equipped with built-in Bluetooth navigation beacons. The beacons create a real-time map of the shop floor, provides help to find the product and notifies the customer when they walk past a special in-app deal.
Applications for small businesses
2020 might be the year when AI starts to close the gap in merchant capabilities that hamper many small businesses. “With AI, small businesses can manage their stores seamlessly and efficiently, both by automating work processes (such as employee management, IT service administration, or compliance regulation management) and enabling better inventory and delivery management,” says Phil Grier, Commerce Engineer for Yahoo Small Business. “AI-based chatbots and virtual assistants further streamline business transactions and increase operational efficiencies, while also providing an optimal customer experience.”
Advertising is still the science and art of persuasion, but machines are much faster at interpreting data from our browsing and purchasing history. Products or services can instantly be presented to a shopper, even predicting future purchase needs. In store, a shopper logged into an app can receive relevant recommendations, coupons and special promotions as they near an item.
As AI technology improves its understanding of human behavior, Tod Loofbourrow, CEO and Chairman, ViralGains, predicts marketing will become “less annoying and more pleasing, useful, relevant and entertaining.” Wouldn’t that be nice!
Even though marketers will be able to tap into technology to gather, analyze and execute targeted campaigns faster, companies that over-rely on manual optimizations will be left further behind as no human can compete with the power of an AI engine.
The human factor
Machines focus on customer’s rational decision making, but that is just a part of human behavior. As humans, our decision making also involves emotions and impulses (hence my late-night Amazon purchase of a home mushroom farm).
As you might expect, scientists and engineers are working on Artificial Humanity. Samsung’s recently showcased artificial human prototype called Neon is supposed to have human-like responsiveness in a realistic artificial reality body, interacting in real time. While interesting, Neon lags in all three areas. So, until this form of intelligence hits its stride, real humans, with our ingenuity, creativity, and innovative problem-solving abilities, will still be necessary for effective customer service.