CHAT BOTS wooden letters and retro robot toys on a wooden floor with reflection

AI is driving monumental shifts in the retail sector, writes Kevin Smith. 

This year, the retail industry has been adopting the latest technology trends more than ever – largely due to the drive to improve the online customer experience. In light of this, technologies such as Artificial Intelligence (AI) are set to become the next big step for retailers following the implementation of advanced big data and analytics solutions.

Gartner predicts that by 2025 customer service organisations who embed AI into their customer engagement centre platforms will increase operational efficiencies by 25 per cent, revolutionising customer care in the process.

Spending on AI systems will double to $79.2 billion in 2022 with a compound annual growth rate (CAGR) of 38 per cent over the 2018-2022 forecast period, according to the IDC worldwide semi-annual artificial intelligence systems spending guide.  The guide highlights that the industry will lead when it comes to AI spending, with companies expected to invest $5.9 billion this year in solutions such as automated customer service agents and expert shopping advisors, including intelligent product recommendations. 

Evolution of artificial intelligence and chatbots

Generally speaking, a distinct advantage of using AI-based technology is the ability to analyse and leverage the vast amount of data organisations now have at their fingertips. Learning the characteristics of consumers can help businesses better understand their behaviour and ultimately meet their increasingly complex demands. In fact, the retail sector has always been analytically driven; with the help of real-time contextual data that is currently gained through integrating AI and machine learning, businesses will be able to isolate their strategies on a success and failure basis. 

Additionally, AI is not only driving greater change in the way marketers are interacting with customers, but also leveraging the use of chatbots. According to Gartner, 25 per cent of customer service operations will use virtual customer assistants by 2020. Chatbots powered by AI technology will be able to capture audible reactions and over time provide analytics to retailers that can be associated with emotions and the mood of their customers while they’re online. These chatbots are not only becoming more human-like in their responses but are also finding more advanced uses with machine learning to extract greater insights from data and enhance personalisation strategies. 

Securing your customer data

While online shopping continues to grow globally, customers will expect more personalised interactions with strong security at the core of their experience. For retailers this means that they must safeguard the data they collect and analyse, especially when they have data floating between systems, making it more vulnerable to hackers. According to the recent Notifiable Data Breaches (NDB) quarterly statistics report, the retail industry in Australia is among the top five sectors that reported data breaches in the first quarter of 2019, accounting for five per cent of total global incidents. The report further shows that almost all of these cases were malicious or criminal attacks. 

With this in mind, businesses have a growing responsibility and obligation to protect their customer data from hackers and any kind of related malicious activity. They must protect at every level and at every single point throughout the IT infrastructure. Effective training, tips and tricks for end-users will provide a clear indication to employees and staff at all levels to consider data security as a top priority, while training these individuals to identify any potentially malicious activity and mitigate against it quickly. Leveraging Artificial Intelligence will ensure the data is interpreted accurately before it enters into the domain of an IT service management solution. Implementing security protocols such as data-centric encryption, tokenisation and multi-factor authentication will also help retailers to protect sensitive data, even when the data is being analysed. 

As technology evolves, AI will continue to be perfected in the years ahead and will play a key role in helping improve and personalise the end-user experience. Rapid deployment of digital technologies and smart devices have many advantages but have also increased cybersecurity risks. Each year cyber-attacks are becoming increasingly sophisticated and have more potential to breach both customer and employee privacy, disrupting critical organisational operations, impacting the brand image and undermining trust among customers. Ultimately, retailers need to develop a more agile and resilient environment and take steps to secure as well as future-proof their business.

By Kevin J Smith, Senior Vice President at Ivanti

For the latest retail industry news and insights straight to your mailbox sign up to RetailBiz’ weekly newsletter. If you have any news or feature tips or know a retail who would make a good retail profile please email Georgia Clark at