It's Time To Get Serious About AI
By Erin Harris, Editor-In-Chief, Cell & Gene
Follow Me On Twitter @ErinHarris_1
November 2016 Innovative Retail Technologies
Some retailers have been utilizing artificial intelligence (AI) for a while now while others are merely dabbling in it. Sure, AI is much louder and more obvious in the mainstream media or in our everyday lives (think the onset of self-driving cars) than it is in retail. But AI applications can help retailers digitally integrate with physical stores and provide richer, more engaging experiences with their customers. Assuming customer engagement is your goal, it’s time to get serious about AI.
Techopedia defines AI as an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Yet retailers’ real hurdle seems to be understanding what AI can do for their organizations. Used effectively, AI can shape all aspects of the retail organization from supply chain to e-commerce to marketing. Coupled with limitless data, AI can help retailers better understand market trends and improve customer engagement via calculated, personalized shopping journeys. And, while AI is a complex concept on its own, it need not be complex for the retail organizations leveraging it to drive consumers’ future purchasing behavior. Indeed, our friend Greg Girard, program director at IDC Retail Insights, just released a stellar study, IDC PlanScape: Cognitive/ Artificial Intelligence in Retail Marketing, which examines the application of cognitive software and artificial intelligence in marketing to improve top-line results, campaign performance, customer loyalty, omni-channel outcomes, knowledge worker productivity, and process agility. “While AI involves data science, it is not science fiction,” explains Girard. “Adopting it need not be a science project. AI’s demonstrated value can be hidden by market hype and organizational myopia. Retailers should cut through the former with clarity and get beyond the latter with courage.”
Data + Machine Learning + AI = Retail Success
Girard is right — AI is not sci-fi but rather an accepted part of an evolving retail landscape. AI learns on its own in real time via machine learning’s algorithms. Solutions powered by machine learning break down the myriad of customer behavior patterns and characteristics that humans simply can’t do on their own. Machine learning is the mechanism that picks up the data; AI is the mechanism that turns that data into intelligence. AI “listens” to your customers and learns about them as they make moves on your site, and, as a result, makes quick, calculated decisions to dynamically deliver a truly personal experience.
Consider, too, that conversational commerce, the topic we dedicated plenty of ink to in our September/ October issue, is another wave of commerce involving AI. AI plays a significant role in conversational commerce — as a chatbot learns more about its users, the AI gets better. Using algorithms to examine photos on platforms such as Instagram helps retailers determine what consumers are sharing about their brands and then uses that information to drive sales.
Gartner predicts that by 2020, 85 percent of customer interactions in retail will be managed by artificial intelligence. If you haven’t embraced AI yet, don’t let that stat throw you; the number of software providers that enable retailers to harness AI’s power grows by the day. The New Year is gaining on us. As you discuss the innovative changes you’ll make to your organization next year, AI should be a key part of the conversation.