Data Analytics and AI in Retail
Data Analytics and Artificial Intelligence:
Data Analytics and AI solutions have been the primary driving factor behind the rapid growth of a variety of industries. Finance, healthcare, manufacturing and, the most important retail are the business verticals that are leveraging the power of these new technologies.
Within the different sectors, the retail industry is a major player in the implementation of AI or data analytics. The industry is witnessing an increase in the adoption of these new technologies due to a reduction in customer churn and an improvement in customer retention rates, and, perhaps most important, to provide an improved customer experience.
All retailers around the world have realized that the insights of customers can do more than just boost profits for their businesses, but can also add value to their businesses by ensuring customer satisfaction, greater retention, and better customer acquisition. This is why retailers are implementing tools and services like AI advanced data analytics and machine learning in their business to gather data, process and visualize data to produce relevant insights.
The rate of retailers adopting technologies such as artificial intelligence and data analytics in their businesses is widely known,
Let’s look at the effect of these technologies on the development of useful customer insights.
The initial method to gain insights is to devise an effective method to gather the information from various sources like reviews, comments or shopping patterns. The same goes for items purchased. It is advised to develop a plan that allows retailers to gather data, process and utilize the information to create personalized experiences. With the aid of assessment and strategy for data analytics services, retailers will be able to create plans of action which will help them to attract new customers and retain those who are already there.
To expand the reach of a company, effective marketing strategies are a must-have asset for every retailer. Data analytics tools like segments of the customer, data mining and analysis of value for customers enable retailers to know what their consumers’ needs are patterns of frequent purchases, as well as purchases. This allows them to present offers based on preference and plans, which will improve customer’s general shopping experience.
- Customer Relationship
The ability to retain customers is based on the connection a retailer has with its customers. Offering attractive offers and customized discounts can be among the factors in strengthening the connection. However, the majority customer relationships are built on after-sales service. What is the quality of support for the product? How fast does the customer gets support by the store?
But, the main issue that customers face is the absence of support and maintenance. This means that retailers are faced with problems with customers, such as churns, and losing prospects.
According to a study conducted by Brisk Logic the majority of customers think that a good their experience with a company is as important to them as the company’s product or service. Since then, the process of capturing the data, processing it, and analyzing the data has become a major problem for retailers. With the advent of digitization of the retail industry the integration technology has grown dramatically.
They can benefit from technology like AI and Analytics on data in these ways:
- Price Optimization
Price optimization is among the main concerns every retailer must consider in order to provide an improved customer experience. The reason is that customers will always go for products that offer the best value for money. This is why advanced analytics tools like assessment and data strategy are useful. These services can provide a useful plan that will allow retailers provide a more personalized experience for their customers.
- Personalized Marketing
Inviting customers to buy from special and customized offers is among the major factors that demand data analytics solutions for the retail sector. Retailers understand that each customer has different preferences and determining a deal that matches their needs is the biggest problem facing retailers in the present. With the aid of cutting-edge technology like AI retail stores can comprehend the needs and preferences of customers.
- Customer Analytics
A positive customer experience can be achieved when a store retains its customers’ names and gives the kind of attention they want. AI-enabled tools for customer analytics let retailers access more and more intricate data areas and reveal the possibility of new opportunities for business. In the end, retailers are able to focus on prioritizing these data insights instead of working on the data.
Additionally, AI-powered tools for customer analytics will be able to pinpoint every single relationship information that a retailer has accumulated. With these data these tools will allow retailers predict the behavior of their customers, which allows them to design an individual marketing strategy that improves the experience for customers and increasing their retention rates.
If customers experience a bad experience with a particular retailer and are unhappy with the experience, they needn’t search for another. The rise of online shopping provides a variety of choices within just a few clicks. If a retailer abruptly ceases to sell the product that they love is just as likely to end the customer’s loyalty to that product, however, a company that provides its customers customized offers has the potential to build their loyalty.
Let’s take a look some Real-World Examples:
Bran was a frequent customer of a departmental shop. A shaving razor was among of his most frequent purchases. Then, Bran stopped visiting the shop. When Bran realized his absence the store offered Bran a gift that was unexpected which was a newly released shaving razor that was a premium model of his preferred brand with a note “We miss you. Your brand of choice has just launched the latest shaving device and you may want to try it. Enjoy your day”, Bran was delighted by the gesture and was delighted that the store was able to understand his preferences. He went back to the store for a second time.
Rebecca was in the market to purchase a laptop for the first time and was overwhelmed by the options that were confusing her. She read reviews online and compared the prices, specifications and reviews of various laptops on the internet. In observing her online behavior the electronics retailer offered individualized advice, including a selection of laptops that could meet her needs , along with coupons for promotional discounts. Rebecca was satisfied with the service provided by the customer and also the discount. She bought a laptop from an electronics store.
For brick-and-mortar and online shops, the key to success is knowing enough about their customers that they can create personalized customer experiences. This is something retailers are realizing. The global market for retail analytics is expected to grow to $10.4 billion by the year 20231 according to an JDA Software survey, 40 of 100 merchandising experts and category managers stated that predictive analytics and big data are their top priorities for investment in the coming 5 years.2
A Shifting Retail Landscape
Retailers that have successfully embraced digital transformation with success are enjoying an edge in a world that is dominated by customer experience. While traditional retailers are taking on new technologies like Internet of things(IoT) mobile, augmented realities (AR) as well as the virtual world (VR) as well as artificial intelligence (AI) and Machine Learning(ML) to engage with their customers, digital players have embraced the advantages of having brick and mortar establishments to improve their experience for their customers.
Here are some of the most revolutionary changes in retail that are currently taking place:
- VR and AR Simulation technology allows users to arrange furniture using a virtual model of their living space, examine the suitability of clothes without having to try anything on or even drive around in a vehicle.
- Customers are increasingly embracing new platforms using technology to look up products and services, which makes it crucial for retailers to respond to customer issues in real-time.
- New categories of retailers are inventing innovative business models like brick-and-clicks that combine both offline and online sales platforms.
- New metrics for measuring the success of a business – customer experiences per square foot are replacing selling per square feet as the main measurement of the performance of retailers.
- The rise of digital technology Retailers are using AI technology to complement human-based customer service. Voice commerce and chat-based shopping are increasingly delivering personalized, customized and localized experiences for customers.
- Mobile devices that are essential to us – proximity technologies like Bluetooth Low Energy (BLE) beacons, near field communications (NFC) along with quick-response (QR) codes offer retailers with opportunities to connect with customers on their mobiles.
- AI and ML have enormous potential for retailers to provide a compelling customer experiences, increase cost efficiency and increase employee satisfaction.
- The way that data analytics, as well as AI intelligence change the way retailers operate
In order to achieve a successful digital transformation, businesses need to go beyond just collect huge amounts of data. Artificial intelligence can provide retailers with the capacity to absorb large amounts of data in a variety of formats across various locations, identify patterns and then respond in real-time.
To Sum Up:
Brisk Logic experience in offering support for data analytics to the top US electronic retailer observed that the application of artificial intelligence (AI) and machine learning (ML) resulted in a 4 percent increase in sales and a 5% increase in the effectiveness of promotions.
Alongside helping retailers tailor their offerings, AI and ML enable predictive analytics that allow retailers to forecast the specifics of a customer’s previous experience into the future and determine the outcomes of things like product sales or renovations to stores. Knowing the outcomes greatly increases the capacity of retailers to prepare for the upcoming events and to respond to customers’ needs in a timely manner.
This means that AI and ML provide a huge opportunity for retailers to create a memorable customer experiences, improve efficiency in costs, and boost the motivation of employees. The data analytics process, AI and, ML are already beginning to change the way that retailers conduct business. Retailers that are able to successfully implement digital technology will benefit from competitive advantages.