Blog post Chatbots, Personalization, Retail, Strategy

How AI Can Work in Retail

The power of AI is no light subject in the retail industry. With nearly half of retailers using some form of AI or machine learning already, the worth of these technologies is pretty clear. Chatbots and personalization are the first steps to introducing AI in retail, but some enterprises are testing AI’s prowess with the help of Marketing Technology Agencies to become more efficient while also delivering a more meaningful customer experience.

There are three main areas where AI is really working for retail. When it comes to personalization, customer service and inventory management utilizing AI technologies are keeping forward thinking retailers ahead of the competition. Here are some examples of retailers and tech companies already working better with the use of AI:


- Amazon has been a leader in developing and using AI technology with its intelligent personal assistants Alexa and Echo. The devices were built using technology developed by Evi, a British startup acquired by Amazon in 2012. Evi developed the software that Alexa and Echo are known for: The ability to accurately interpret questions and reply with natural and more conversational answers. Alexa changed the “chatbot” image of AI assistants to something more personal.

- Cosabella Lingerie firm worked in collaboration with Sentient Technologies to take the personalization of their website to the next level. They used an AI-powered algorithm to test alternative options for its website design based on the conversion rate of each variation applied. A time consuming A/B test would’ve usually been run to achieve these results but AI found a knew way to prove itself in this regard. Cosabella reported a 30% increase in conversion rates thanks to the AI optimized website designs.

Customer Assistance:

- British retailer Shop Direct and tech giant IBM have been powering and using chatbots together for some time. Using CUI (Conversational User Interface) has helped relieve employees of repetitive tasks to allow them to accomplish other things not possible with AI. Shop Direct and IBM are still working on making their chatbots better and more responsive to customers’ moods and tones of voice in their messages.

Replenishment Optimization:

-The Otto Group retailers are using AI tech developed by Blue Yonder that can predict with 90% accuracy what customers will buy. They can preorder and cut down drastically on delivery times and returns with this technology that analyzes billions of historical transactions and 200 other variables (such as weather conditions and website searches) to predict future purchases. This enables Otto Group to automatically process orders with partner suppliers for about 200,000 items every month.

AI is continually proving itself to retailers as it allows them to actually utilize and benefit from the abundance of customer data available in the industry as it digitizes. Finding ways to utilize data to power decision-making are what tech and software companies are doing right now and how retailers already investing in AI are becoming industry leaders.

Retail is one of the top-end markets for investing in retail technology, which means if you haven’t invested in it yet, your competitor probably has. Retailers using the latest AI technologies are able to provide the most personalized and relevant customer experiences, which is a proven method to increase conversion rates. With AI, retail has found a hardworking friend that turns data into educated decisions that improve operations and total company profitability.

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