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AI in Retail: How It’s Being Used in 2020 (+4 Brand Examples)

May 24, 2019

The news has been inundated with stories about brick and mortar stores closing at an astounding rate. 

Sears. Payless. Toys "R" Us. Charlotte Russe. Kmart.

All of these stores and more have filed for bankruptcy and ultimately shut down for good within the past three years. But why?

We could debate that it’s because of online shopping wiping out the retail market, but in reality, each store chain listed above suffered from a combination of issues: too much inventory, high prices for low-quality goods, targeting the wrong audience, or failing to keep up with modern trends and customer needs.

You might be wondering how their failure to succeed affects how other retailers are managing to keep up with modern trends and still be successful. 

It all boils down to this: retailers that have managed to stay afloat not only have broken into the e-commerce market, but successful retailers have begun implementing AI-based technologies into their business strategies.

TIP:  Check out these retail merchandising tips that will help you see how winning brands do it right.

4 ways retailers are using AI

With artificial intelligence automation becoming second nature for many businesses, the retail industry is jumping on board the AI train. 

Jump ahead to read more about the following ways AI is being used by retailers:

  1. Acting as a customer help agent
  2. Speeding up the shopping and checkout process
  3. Providing ‘concierge’ services through chatbot automation
  4. Allowing creative design ideas to come to life in real time

1. Acting as a customer help agent

Picture this: you’re walking down the housewares aisle without any idea where to find a wicker basket. You’re lost and need help from someone who works at the store, but they’re nowhere to be found. Instead of walking around aisle upon aisle to find a sales associate who can help you, you get frustrated and mumble to yourself before storming out empty-handed.

Oftentimes, the above scenario plays out, causing the customer to become dissatisfied with their in-store experience and the store itself. Similarly, it causes the retailer to lose a guaranteed sale and potential extra money in additional sales from that same disgruntled customer.

To ensure something like this happens less often, retailers like Lowe’s have been using AI robotic technology in their stores since 2016 (in the San Francisco Bay Area). LoweBot is an autonomous retail service bot that travels up and down store aisles, being present to help answer customer questions and guide people in the direction of what they’re seeking. What’s incredible about this innovation is that it helps Lowe’s human customer representatives free up time in their schedules to focus more on top-level customer questions that the LoweBot cannot answer.

Customers can interact with LoweBot by speaking directly to it and using its touchscreen to ask questions and reply to responses it provides. LoweBot can also walk alongside a customer and physically lead them to where they need to go. 

 

2. Speeding up the shopping and checkout process

It sometimes seems like there’s never a right time to go grocery shopping. If you go during the early afternoon on the weekend, everyone else is there because it’s their day off from work and have errands to do. If you go after work on a Thursday night, tons of people are there because they forgot to pick up wine to go with their dinner or their child forgot to take the pack of chicken out of the freezer.

No matter when you go, there’s bound to be long lines that seem to take forever to get through. The person in front of you is an extreme couponer and the cashier wants to talk your ear off about their latest TV binge. You don’t have time to waste and would rather spend your time finding the groceries you need, paying, and getting out as quickly as possible with a minimal amount of distractions along the way. 

To help relieve stress, tech company Caper has successfully created an AI shopping cart that helps customers in every way possible. Caper is built with the capacity to see and scan items for purchase and log the items in the cart, like a shopping list of things you’re already intending to buy. The cart has weight sensors as well so customers can pick and bag loose produce and not have to use the outdated, inaccurate balance scales to estimate the cost of their bag of pears.

Additionally, Caper has a touchscreen where customers can interact with the cart; the cart, in return, provides meal recommendations, informs customers of other items they need to purchase, and navigates the easiest route to different sections of the store to help make the shopping process a little less complicated.

The best part? Caper also has a card slot where you can insert a credit or debit card as payment before simply leaving the store without having to pay at a register or wait in line whatsoever.

These crafty innovations cut back on the time consumers spend in a store while still maximizing their spend by offering recommendations based on current cart selections. The more helpful and engaging customers see the shopping cart to be, the more likely they are to spend at their leisure. 

 

3. Providing ‘concierge’ services through chatbot automation

Your grandmother’s birthday is two days from now, but you live in a different state and want to get her a gift. But with little time, nothing you send will make it there by her actual birth date. So you decide to look at an online flower and gift shop, but are overwhelmed with the choices, gift packages, floral arrangement sizes, and prices. Frustrated, you want to give up. But you really don’t want your grandma to think you forgot about her. You need help deciding what to get, but since you’re shopping online, there’s no customer service agent to ask for recommendations from – until now.  

E-commerce retailers like 1-800-Flowers decided to bring the in-store shopping experience to their customers online. Because they are a retailer that does not also have brick and mortar stores, they use AI innovations like chatbots that can act as a point of communication in order to provide personalized assistance to their customers. 

In 2016, the company launched GWYN (Gifts When You Need), an AI-powered gift concierge chatbot. GWYN’s purpose is to replicate that of a human concierge that helps customers choose the best gift for their needs. It holds personalized, detailed conversations with customers through the online interface. 

 

By using machine learning (ML) algorithms, GWYN learns from interacting with customers. Its purpose is not only to communicate and act as a concierge, but also to ensure that people follow through with their intended purchase. Where someone can simply leave a store without being asked to reconsider their purchasing options, e-commerce retailers don’t want to risk cart abandonment, which causes them to lose out on a sale. 

To help prevent this from happening, chatbots like GWYN are being added to retailers’ e-commerce sites via chatbot software to assist with questions, provide recommendations, and learn from the customer’s likes and dislikes in order to make their experience as personalized as it can. 

See the Easiest-to-Use Chatbots →

4. Allowing creative design ideas to come to life in real time

You might have noticed some game app ads pop up on your phone about designing your home and letting your creativity flow. You get to choose the wall colors, the furniture style, a modern or classic vibe, and anything else your heart desires. But in real life, watching designs come to life with such speed is nearly impossible.

If you’ve ever had plans to renovate your home, you’ve probably had to get in touch with contractors, designers, and painters for price quotes and help with visualizing what ideas you have in your head, but aren’t sure how to see without a finished product in front of you.

Well, long gone are the days of hunting for paint cards at your local hardware store thanks to DigitalBridge, a tech startup company that uses artificial intelligence to actualize customers’ home design visions via Aspect, DigitalBridge’s online design assistant.  


Aspect allows customers to select the room they want to redesign, choose the aesthetic elements such as color, style, and placement, and tells them potential cost and if their idea is tangible and executable. Aspect is an AI help agent that behaves like a fusion of a designer, contractor, and hardware store expert all in one, with an ultimate goal of allowing customers to envision their design dreams via online, remote assistance.

What to expect from AI in retail in the future?

As more companies grow interested in artificial intelligence and follow spearheading industries like healthcare and marketing, the growth of AI technologies in AI will soar. Soon we’ll encounter more LoweBot-like robots walking side-by-side with customers in store aisles, and more AI-friendly shopping carts that help customers not only find the produce they’re looking for, but also how to cook it when they get home. 

All-in-all, AI is becoming a part of our future. Let’s use it to our advantage. 

Want to learn more about AI innovations in other industries? Check out how artificial intelligence is affecting edtech and small business!

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