AI is expected to improve key points in the retail industry including customer engagement, business intelligence, profit margins, competitiveness, and innovation.
The retail industry has undergone many adaptations and innovations over the centuries to continue to exist. Entering 2020 with many fluctuations from the trade war, the strong development of technology, to the current Corana epidemic, the changing user trend forces businesses to take steps to adapt.
Digital platforms change retail industry in high interest investments
Instead of going to many places to choose the right item, nowadays customers just need to sit at home and order shopping from multiple sources with a simple operation on their phone or computer via a digital platform. This is a challenge but also a great opportunity for a company to display its brand and get customers to buy more than they need.
Digital marketing firm Wunderman Thompson predicts that the new era of retail requires a complex understanding of the digital market. Accordingly, the stores no longer operate independently, but have almost limitless connections with digital interactive points and interactive mirror technology that major international retail brands are experimenting with.
The success of leading international online shopping retailers in high interest investments such as Amazon, Lazada or rising names in the Vietnamese market such as Tiki and Shopee is proof of the benefits of technology and digital branch.
In its comments on 23 industry groups, SSI stated that the retail industry will be negatively affected because the number of customers buying will decrease due to limited user visits to public places to limit infection in Covid-19 epidemic. But this is also a time of growth for digital-based businesses as consumers will switch from traditional commerce to e-commerce, online shopping to ensure safety and hygiene.
There are many factors that affect the retail sector, but the digital platform is seen as a deciding factor, affecting the entire industry not only now, but for many years to come.
AI technology drives industry growth for high interest investments
Over the past few years, AI technology advancements have had exciting turning points in industries, including several innovations in the retail sector. Used correctly, AI can reduce human error in different levels of the retail process. In addition, AI technologies have helped personalize the shopping experience for consumers, reduce shipping costs for sellers, help workers apply new skills and improve supply chain efficiency.
According to research by Global Market Insight, the retail sector will increase investment in AI to $ 8 billion by 2024. Adopting machine learning, deep learning, and predictive analytics is essential to success in the retail industry is growing at a rapid pace. Global AI experts agree that the technology has a lot to offer any retail segment.
A report by Microsoft Asia and international data group IDC shows that with the adoption of AI in operations, retailers have improved on average by 16-29% on five major industry issues, including involvement of customers, business intelligence, profit margins, competitiveness and innovation. It is expected that by the beginning of 2021, they will improve by 37-44%.
"In order to remain competitive, it is necessary to transition to smart retail for easy addition, convenience, personalization, and automation to business processes and operations, and customer experience as well products and services are provided, ”said Raj Raguneethan, Microsoft Asia Consumer & Retail Business Lead.
The two most visible applications of AI to the retail industry are chatbots and machine learning. Speaking of customer service, AI chatbots are making a huge contribution to the retail and marketing industry. The goal of implementing chatbots in e-commerce businesses is to increase customer experience and provide personalized services.
Retail business chatbots are popular on Facebook Messenger, Sephora and Pizza Hut. The popular motive is to make it easy for customers to get what they want without having to call, email or visit their website for an answer. This gives the retail industry a great opportunity to increase sales online without spending too much.
On the other hand, AI and machine learning can help increase efficiency, improve accuracy, and increase customer engagement for the retail industry by using algorithms, modeling, and processing of huge datasets quickly. This is also one of the factors driving 79% of retailers claiming to use AI, machine learning, and chatbots in business activities (according to IBM research).
With the benefits of technology and increasing demand from the retail market, this is expected to be a new investment and development trend for businesses, investors, startups and start-ups projects in 2020.