Artificial intelligence (AI) has a significant influence on the retail sector, from predictive analytics to gathering customer data. The integration of advanced technologies like natural language processing (NLP) and computer vision is further deepening this impact.
AI’s role in retail began over two decades ago with Amazon’s recommendation engines, initially focusing on automating tasks like data analytics and inventory management. It also helped in market segmentation by analysing demographic data and customer behaviour, enabling targeted marketing campaigns. Today, these applications have evolved. Modern chatbots and personal assistants enhance customer support through almost human-like conversations. Visual search tools revolutionise e-shopping, and AI-driven robots handle tasks like sorting and packing. Retailers also use AI to analyse customer feedback and build emotional loyalty through personalised experiences.
Key statistics highlight AI’s importance in retail: the AI in retail market could reach $40.5 billion by 2025. AI can reduce inventory management errors by 50%, enhance retail efficiency by nearly 60% by 2035, and boost revenue by up to 10% through personalisation. 69% of retailers report positive revenue impacts from AI, and 65% of customers prefer chatbots for initial customer service. AI also helps reduce customer churn by nearly 70% and can increase conversion rates by up to 30%.
The future of AI in retail promises even greater advancements, such as hyper-personalisation, visual fitting rooms, AR shopping, and autonomous stores. Predictive analytics will enable retailers to forecast trends and tailor offers more accurately. Embracing AI is now essential for retailers to stay competitive and leverage its full potential.
itim Group plc (LON:ITIM) is a SaaS-based technology company that enables store-based retailers to optimise their businesses to improve financial performance and effectively compete with online competitors. Itim adds retail value by helping multi-channel retailers optimise their business and their stores to improve financial performance and compete more effectively with the “Amazons”.
