As artificial intelligence (AI) is expected to upgrade personalisation, experts believe predictive AI in retail can change users’ shopping experience. From personalisation to autonomous checkout solutions, predictive AI can be the future of retail. Experts believe that with predictive analytics, customer experience can be enhanced. For example, predictive AI can suggest personalised products based on the purchase history of existing data of users. Sentiment analysis is another area which can aid AI in suggesting goods to buy. “Predictive AI uses customer feedback, reviews, and social media chatter, among others, to gauge how customers feel about a brand or service. Predictive AI can recommend specific actions for each customer. Be it a personalised discount, a well-timed upsell, or just the right kind of content, it’s all about enhancing the customer journey by aligning with individual preferences,” Sivakumar Muthusamy, practice head, digital technologies, Infovision, a global IT services and solutions company, told FE-TransformX.
AI’s impact on fashion retail
Reportedly, the integration of AI is gaining prominence in India’s retail landscape. About 71% of Indian retailers are expected to adopt AI in the upcoming year, which will represent a significant operational change, as per insights by EY, a market research firm. As per several media reports, Blackberrys, a clothing brand used AI to increase revenue through omnichannel engagement, using algorithms which analyse reachability, responsiveness score, and conversion probability, among others. Apart from this Bata, a footwear brand, upgraded its in-store metrics with Agrex.ai. This AI-based video analytics system utilised the store’s existing video infrastructure to implement data harvesting and insight generation on smart conversion and audience segmentation.
Around two-thirds of retail professionals mentioned that using AI is crucial in optimising store operations. The market for AI in the retail industry was valued at $6.32 billion in 2022 and is forecast to grow at a CAGR of 30.5% between 2021 and 2028, as per insights from Statista, a market research firm. Case in point Nykaa, a personal care and beauty platform, collaborated with Verloop.io, a conversational AI solutions provider, to increase customer engagement by solving customer over chat. “Recommendations pushed with the help of AI can check consumer records and offer personalised product tips that improve user interactions and growth sales. Furthermore, by answering questions, dealing with orders, and presenting instant assistance, chatbots powered by AI can enhance customer service,” Pooja Sodhi, co-founder and CEO, Combonation, an e-commerce platform, explained.
With the introduction of an end-to-end shopping assistant ‘Flippi’ powered by ChatGPT, Flipkart aims to enable consumers to find products that align with their tastes and needs in an intuitive, conversational manner. ‘Vibes’ – a new video browse feature that can be accessed by swiping to the right on the Flipkart application homepage, integrates the shopping experience with video content, thereby bringing the traditional window-shopping experience to the platform. Flipkart claims to have witnessed a 21% increase in conversion on products enabled with skin analyser, indicating the adoption of the feature
Future of AI in retail
Industry experts believe that chatbots, virtual assistants, virtual try-ons and augmented reality(AR) among others, can be the additional benefits of AI that further augment hassle-free shopping experiences. Successful adoption of AI in retail is expected to improve customer satisfaction and increase operational efficiency, among others. Apart from retail, other industry such as online grocery stores and hyper-local delivery platforms, among others can be benefitted from predictive AI. “Predictive AI can analyse historical sales data, market trends, and external factors to predict demand more accurately. Brands can optimise inventory levels, minimise excess stock, and reduce holding costs through understanding future demand,” Jayesh Jose, CTO and co-founder, FreshToHome, an online fish and meat delivery company, noted.
The potential adoption of generative AI in retail could boost profitability by 20% by 2025, reducing costs and increasing sales through personalised consumer experiences, as per insights from EY. However, critics argue that on the ethical front, as retailers integrate generative artificial intelligence (Gen AI), there arises a challenge of preserving consumer privacy. This necessitates thoughtful consideration, especially regarding location tracking for real-time promotions, raising concerns about continuous monitoring and its impact on privacy perceptions. “Ethical considerations extend to transparent data usage, emphasising the need for retailers using generative AI to communicate the purpose and utilisation of collected data. Additionally, preventing biases in data representation is crucial, ensuring fair and balanced services for all customers,” Ibrahim Khatri, co-founder and CEO, Privezi, a technology solutions provider, concluded.
