October 19, 2020

6 Benefits of AI in The Digital Transformation in Retail


Many retailers are seeing the benefits of AI’s technological capabilities on their business and are implementing it to stay competitive on the market. Intelligent data analysis, automated manufacturing, smart shelves, and self-checkout are just some of the ways that AI is optimizing retail processes and engaging customers for a more satisfying shopping experience. In this post, we share six benefits that AI is carrying along to prove its dominance in the digital transformation in retail.

From virtual fitting rooms and autonomous delivery trucks, to computer vision shopping carts and interactive tables displaying nutritional value at grocery stores — the future is full of exciting new possibilities for retail all thanks to AI. Keep reading to learn more about the AI technologies that are making an impact on retailers and consumers in 2020.


1. Setting smart price adjustments

It’s a well-known fact, that AI is highly beneficial for analyzing trends and structured data. AI tech services, such as AutoML Tables allow for the creation of accurate forecasting models, which enable retailers to better meet customer demands and plan for future product releases based on patterns in consumer behaviour.

eBay and Kroger are already using AI for price optimization, which allows them to fine-tune their promotions and target specific customers directly. This of course is achieved through the accumulation of data (i.e. product demand info, transactions, campaign response). Data analysts work with prediction models to grasp the results presented and communicate them to their team in order to set the appropriate prices for the season ahead.

2. Achieving higher customer satisfaction

Meanwhile, last year Google launched their Contact Center AI agent that is deployed to call centres and is able to hold a natural conversation, answer questions back and forth, leading the customer’s decision-making process. The solution aims to eliminate call waiting and the dialling of numbers as customers are instantly connected to the AI agent. When the issue becomes complex, the call is forwarded to a human support representative.

The tech giant also introduced a powerful new method of searching. From initially starting out as a text-based search engine, Google has realized the power of the voice, and now it is moving towards product search through photographs and machine learning. Their Vision API Product Search solution enables customer shopping based on visual information. Retailers assign reference images to their products and organize them into different product sets. When a customer snaps a photo using the retailer’s shopping app, the product is searched within the product set and visually similar images are displayed for the customer, easily letting them evaluate whether to make a purchase, help them choose a model, colour or size of the product.

3. Automating supply chain and logistics

The emergence of warehouse automation has had a great effect on the digital transformation in retail. LogisticsIQ estimates that its market will hit $27 billion by 2025. Warehouse automation allows for repetitive processes conducted by workers to be replaced with specialized machines as well as storage and retrieval systems that have the ability to improve inventory accuracy to 99%, reduce labour costs by 3% yearly, and increase chances by 40% to ship products within one day of their order (Robotics Business Review).

Additionally, there has been some progress in self-driving AI trucks to aid in the automation of the logistics processes. Currently, companies are investing in highly automated driving with aspirations to reach full autonomy in the years ahead. Last summer, Waymo signed a deal with Renault and Nissan to work together in releasing robot taxi delivery services in France and Japan. Toyota has teamed up with SoftBank in the development of robot cars and autonomous driving services, while UPS has invested money in the autonomous truck startup TuSimple (valued at $1 billion last year). Of course, achieving optimal safety will take some time, so we need to be patient, but automated driving trucks sounds pretty exciting, doesn’t it? Definitely something to look forward to.

4. Fashion and beauty are going virtual

Considering the effects of the pandemic, retailers including Macy’s and Adidas and soon ASOS as well, are starting to roll out virtual fitting rooms to alleviate any stress and worry, letting customers try makeup and clothing on from the comfort of their own homes.

Zeekit is one tech company that is offering an AI-powered app to let customers easily shop from thousands of online stores by simply scanning their body and fitting the product’s measurements accordingly. The company reports that product returns from their partner retailers have decreased by 36% after implementing the solution. The question is whether virtual fitting rooms will continue their use after the pandemic dies down. Until then, it remains to have a positive effect of the digital transformation in retail, proving to be a useful tool for many shoppers and major fashion and beauty companies. What’s your take on the matter?

5. The retail-grocery industry is offering higher efficiency, personalization

Today, AI technology is able to offer families both higher efficiency and a more personalized grocery shopping experience. In a recent study by FMI and Nielsen, 70% of consumers are expected to purchase their groceries online by 2024.

This is pushing brick and mortar stores to reevaluate their design, layout and function in order to stay current and enter swiftly into a digital transformation. As many consumers do still prefer selecting fresh items on their own, major supermarkets will need to make some changes, providing customers with smart tools to boost in-person engagement. Luckily, AI is there to help.

Smart screens and interactive tables that communicate nutritional data may start replacing ordinary shelves, as the ones developed by Carlo Ratti Associati and built by Coop Italia, Italy’s largest supermarket chain. The two organizations hope that this technology will promote and lead to more sustainable consumer behaviour.

To improve the in-store experience, some grocery stores are introducing sensor-based Caper Lab carts that use computer vision to detect items that are tossed inside, letting customers skip the queues and leave the store after paying using card or mobile payment directly on the cart.

Meanwhile, since 2017 Walmart has implemented over 45,000 autonomous shelf-scanning Bossa Nova robots, to audit inventory in 350 of its stores. The robot’s aim is to decrease manual labour and free up time to serve customer needs.

6. A smarter kitchen to cook, dine and dance in

Now, moving on to our kitchen. A fridge that writes your grocery lists, plans meals and streams music? Yes, please. A smarter kitchen is another exciting opportunity presented to families thanks to AI’s role in the digital transformation in retail. Early this year, Samsung introduced its first AI-powered Family Hub refrigerator, using its ViewInside camera technology to scan products, sending consumers updates when their items are running low and close to depletion. The fridge works alongside meal-planning app Whisk, which keeps your preferences in mind, connects your shopping lists to your phone, and recommends meals based on diet restrictions and the number of guests you’re having over.

LG is soon to launch its own ThinQ fridge with similar features, including special themed playlists that go well with the food you’re serving at your next soiree. The fridge comes with its own app, that sends you notifications like, “Ready for a great dinner? What would you like to make?” or “It looks like the milk expires today.”

With such a new aid in the kitchen, it’s fair to wonder whether the technology will make our combined shopping, cooking and eating experience more enjoyable and stress-free, or lean towards being an overpriced, impractical addition to our kitchens? We’ll have to wait it out and see, as AI fridges become more widely available, and people start weighing out the pro’s and con’s to their unique lifestyle.

AI is making retail more efficient, accessible and engaging

Without a doubt, AI technologies are proving to be a dominant player during the major digital transformation in retail, and they are here to stay. We will be witnessing the launch of many products and services that optimize processes, strengthen data accuracy and create ease of shopping for customers both in-store and online, adding a higher level of engagement through various interactive tools.

At Scalefocus, we celebrate innovation and are passionate about staying on top of AI industry trends, placing the inspiration and knowledge we gain towards crafting new, scalable solutions. Why not check out what we’ve been up to lately?

We’ve got the experience, skill and momentum to keep pushing further and offer organizations smart ways to digitally transform their business while solving specific problems and reaching new milestones. Reach out to us for a free consultation on how AI can accelerate your growth and can take you closer to meeting your business objectives.