Everyone, it seems, is talking about artificial intelligence.

Whether in the form of consumer interfaces like Amazon’s Alexa or Google Home, or less visible uses such as the way our information is being analysed behind the scenes, AI is growing at an astonishing rate. And nowhere more so than the retail sector.

The TCS Global Trends Study revealed that in certain industries up to 90% of companies are already using or attempting to use AI, while another study from Juniper Research predicts that global retail spending on AI will grow to $7.3 billion per year by 2022, up from an estimated $2 billion in 2018.

The retail industry is already using AI across the board, from manufacturing and sales to payments and logistics. The sector is unusually well placed to make use of AI because it has a massive amount of consumer data which can be used to streamline processes and enhance customer experience.

In the past this data has been difficult or even impossible for most companies to effectively analyse. AI can help even small companies use the information they have to create, for example, targeted shopping experiences, online chatbots or in-store intelligence that will make the customer experience more interactive and rewarding.

Examples of the use of AI in the retail sector can be bold or subtle – but either way, they are changing the way we shop.

Global retail spending on AI will grow to $7.3 billion per year by 2022

Humanoid salesmen

In 2010, Japan’s SoftBank telecom operations partnered with French robotic manufacturer Aldebaran to develop Pepper, a humanoid robot that can interact with customers and – it is claimed – perceive human emotions.

Pepper is now well established in Japan where it is used as a customer service greeter and representative in 140 SoftBank mobile stores.

According to Softbank’s Robotics America, a pilot of Pepper in California’s b8ta stores saw a 70% increase in foot traffic in some stores and 50% of sales of some items attributed to the robot.

Nestlé announced in January 2016 that it planned to acquire Pepper robots to put in 1,000 of its Nescafés in Japan.

A good example of how AI can help both customers tailor their buying decisions is Olay’s Skin Advisor – an online consultation platform that estimates the age of a user’s skin from an uploaded selfie.

By using AI to evaluate the condition of the skin, the platform can provide personalised skincare routines and reports and also links through to an online store.


Pepper Robot Assistant with Information screen                 Source: VTT Studio / Shutterstock.com

A personal service

ShopBot is eBay’s chatbot that promises to help people find the best deals from eBay’s often overwhelming number of listings.

The more you interact with the bot, the more it learns about you and is able to recommend things you like as well as finding items that are your size and favourite colour. You can also upload a photo of an item you are looking for and ShopBot will try to find you the most similar thing for sale.

Retail start-up Wheelys has designed a prototype self-driving supermarket that navigates to different locations throughout the day and uses artificially intelligent holograms to help customers.

Unstaffed and checkout-less, the shop could eventually be able to drive itself to the warehouse to restock. While still very much in its infancy, this marriage of AI and cutting-edge retail could help to change the way isolated communities, and those with limited mobility, are able to shop.

The customer journey

Until recently, retailers tended to use most new technology to improve their ordering and distribution systems.

With the development of AI, the focus is now on understanding the customer and making their experience as easy and enjoyable as possible. Retail is increasingly about the entire customer journey.

AI is making it much easier for retailers to cater for their customers – providing a tailored and convenient service – while also improving their margins and retaining a competitive advantage.

Whether in the form of a targeted ad, an online personal shopper or a physical supermarket on wheels, AI is set to transform the way we buy and sell things in ways that we are only just beginning to understand.