As e-commerce sales continue to grow and more consumers turn to online shopping, retail stores have been forced to innovate in order to attract and maintain the attention of their customers, especially Millennials. One of the most innovative ways bricks and mortar stores are doing this is through machine learning (ML), the key application of Artificial Intelligence (AI).

The many wonders of AI and ML

AI and ML provide retailers with invaluable information which when applied strategically, has the potential to transform the in-store customer experience by making it more personalised and engaging, and by blending virtual and physical shopping channels.

The information gleaned from ML allows retailers to make more accurate predictions about sales, trends and traffic, and more informed operational decisions—from staffing and inventory, to when sales events should be held. ML also helps them to better understand their customers’ needs and wants, which is critical in allowing them to tailor their offering to provide enhanced customer experiences.

The retail sector’s spend on AI and ML is expected to reach $7.3 billion by 2022, so the industry is certainly becoming more invested in the technology. And those who have already implemented AI and ML are seeing the benefits—with two in five reporting cost savings, improved productivity and better decision making as a result.

Using AI and ML to enhance the customer experience

One of the ways retailers can implement AI and ML to enhance the customer experience is by using it to integrate customer relationship management software (CRM) with business intelligence. This application of the technology provides shop assistants with real-time information about customers, such as their sales history and purchasing preferences, to help them deliver more personalised customer interactions.

Some of the more popular applications of AI and ML include chatbots and virtual assistants. While these tools are often considered an element of ecommerce, they are also used as an extension of the in-store experience to allow retailers to respond instantly to customer enquiries—like product features or fit, availability, terms of sale, and in-store promotions—outside of business hours.

ML can streamline and sophisticate retailers’ supply chains and inventory management, ensuring popular items don’t sell out and customers aren’t forced to shop elsewhere. In fact, JDA & KPMG’s 2019 Digital Supply Chain Investment Survey found that 80 percent of CXOs see AI and ML as the most impactful technology for solving complex supply chain problems.

The technology is only as powerful as the data that drives it

While the potential applications of AI and ML to enhance retail experiences for shoppers are seemingly endless, the technology is only as effective as the data that powers it. ML learns to recognise and predict patterns from the data it’s given and the better the data quality, the smarter the ML becomes.

If they aren’t already, retailers need to become data savvy businesses to fully realise the benefits of ML. They must pay attention to how they’re gathering, storing and managing data, and regularly undertake data cleansing processes to ensure poor quality data isn’t compromising sales. Frequently cleaning data to remove or merge duplicates and standardise content is critical in this regard.Third-party software Data Management Tools such as DemandTools and DupeBlocker can help retailers to stay on top of data by automating these processes. In addition to correcting specific data issues like duplicates or incomplete data sets, the software can also help retailers to implement an entire Data Governance regime to ensure data integrity is maintained and to prevent further issues from arising.

Where to from here?

While the use of AI and ML in bricks and mortar stores continues to grow in Australia, in reality we’ve barely scratched the surface when it comes to the technology’s potential. Gartner predicts that by the end of this year, AI and ML will play a role in 85 per cent of customer interactions.

The opportunities for retailers to invigorate and enhance the in-store experience are huge, however businesses that see AI and ML as the silver bullet for customer attraction and retention, without understating the importance of the data that fuels it, will be left disappointed.

Tunc Bolluk is regional director – APAC at Validity Inc