How AI in Retail Is Changing the Game for Brick-and-Mortar

In today’s digital world, where we’re constantly exposed to seemingly endless amounts of data, filtering the noise is increasingly difficult. Many business leaders are under the impression that more data equates to more answers, and although we have access to expansive amounts of analytical information, it’s easy to get lost in a sea of data points and figures.

Notably, in the nuanced retail landscape, collection, aggregation, and analysis of the right data can provide us with actionable answers to business inquiries that we once thought were out of reach. And thanks to artificial intelligence and machine learning, gathering, understanding, and leveraging that crucial intelligence is easier than ever before.

Despite e-commerce’s rapid rise in popularity, brick-and-mortar stores still hold great opportunities for retailers to use in-depth data analysis to better the experience for customers—and solve a number of other common retail challenges in the process.

Smart Technology’s Influence on Retail Businesses

With so much information available about their markets and audiences, modern businesses need a method for efficiently managing and analyzing all that data. Then, they need a way to use that data to support their business objectives and optimize operations.

The use of smart tech in retail, specifically for in-store shopping, isn’t new—self-checkout, for example, was first implemented decades ago in the mid-1980s. Fast forward to 2018, when Amazon started implementing its innovative “walk-out” tech. Amazon’s Just Walk Out technology skips the physical checkout entirely for a “checkout-free” shopping experience. By employing high-tech cameras, sensors, RFID, and generative AI software, this method allows buyers to simply walk out of the store with their desired items and access their receipt later via their internet browser.

This is just one example of the implementation of smart technology in brick-and-mortar stores expanding rapidly in just the last few years. In-person retailers are witnessing a tech timeline of rapid evolution from your everyday self-service kiosks to increasingly advanced technological systems powered by AI, including but not limited to:

• GPS-assisted product locators
• Personalized purchase recommendations
• Loss prevention using facial recognition
• Automated in-store restocking and price changes
• Warehouse route mapping

One aspect of digital technology that has quickly caught on with physical retail stores, partly because of the unexpected demands of COVID-19, is virtual queuing. These systems use the latest technology and user-friendly software to manage customer flow and maximize satisfaction at every step of the customer journey.

Benefits of Implementing AI in Retail Stores

An AI-driven customer experience may sound impersonal at first, considering it involves little to no interaction with an actual person. This is a common misconception; however, AI-assisted retail technology is frequently used for customizing services to meet specific consumer needs before requiring a live agent, not instead of an agent. For example, many businesses are using artificial intelligence in retail to gather relevant information about a customer’s needs before their in-store visits in an attempt to streamline—and thus improve—the quality of their trip to the store.

Smart technology for retail businesses can also offer crucial insights regarding consumer behavior and demand. Retailers can easily track changes and trends as they occur, course-correcting and reallocating resources as necessary. This increased ability to understand your customers’ decision-making processes as they happen means your business can quickly adapt to unexpected shifts in retail activity.

How the Role of AI in Retail Is Shifting the Norm

As of recently, the overall attitude toward AI in retail has shifted. Smart technology has gone from “nice to have” to essential to daily operations. Retail, like many other industries, is often cutthroat and competitive, so businesses must take creative measures to remain at the forefront of their markets.

Lately, retailers are relying on the latest in AI technology to transform their merchandising and business operations, effectively setting them apart from competitors in consumers’ minds. Below are a few examples of how today’s in-person retailers are using AI-assisted software and smart technology to gain an edge.

Revolutionizing the Customer Experience

AI in retail is redefining in-store interactions by personalizing shopping experiences. AI-supported virtual queuing technology ensures seamless in-store journeys by reducing wait times and enhancing customer satisfaction. Not only does queuing technology provide associates with helpful service information before an appointment arrives, but the same automated software can also gather feedback once the customer leaves, providing the business with an opportunity to improve future brand interactions. Businesses can further personalize the buyer experience with AI-supported product recommendations based on purchasing behavior, which can be delivered while they wait in the queue.

Optimizing Inventory Management

Leveraging AI-powered analytics, retailers can efficiently forecast demand and manage inventory, significantly lowering the likelihood of stockouts or overstock situations. This visibility is particularly beneficial during peak periods and for industries highly affected by seasonality. Virtual queuing complements this by streamlining the customer flow and simultaneously anticipating demand, ensuring a balanced and efficient in-store experience for customers and staff alike.

AI-powered virtual search and item location is especially useful for large stores with a vast range of products available (think Lowe’s or Walmart) because it gives both customers and associates the tools to quickly find what they’re looking for.

Making More Data-Driven Decisions

AI-powered tools can provide valuable insights into customers’ behaviors, preferences, and purchasing patterns. With this actionable data, retailers can make informed decisions regarding their operations, such as adjusting staffing levels during peak hours to maximize resource allocation, leading to better operational efficiency. AI can even analyze receipts and returns and see what items are popular and make stock suggestions.

Adapting to Changing Customer Expectations

As consumer preferences evolve, using AI tech for retail operations allows businesses to stay ahead of changing trends. Virtual queuing technology, as part of this evolution, ensures a modern, contactless shopping experience that aligns with the growing demand for convenience and safety in physical stores.

One way that AI is impacting customer experiences is through advanced customer sentiment analysis. Capable of up to 90 percent accuracy, this method of gathering customer feedback uses smart technology to review text-based comments and analyze their tone and context. This unstructured data is then used to address—and, ideally, resolve—the customer service issue, all without the participation of a human agent.

Create a Better Experience at Every Touchpoint

In short, the right data can provide invaluable answers to age-old retail problems—and AI, along with other forms of smart technology, is the latest tool for accessing that essential data. When implemented correctly, machine learning and smart technology have the power to automate repetitive or complicated processes that could once only be performed manually, particularly for brick-and-mortar locations where the physical experience is paramount.

This technology is advancing and adapting quickly to the needs of both businesses and consumers, both in person and online. As a result, retailers require a state-of-the-art system that can reliably satisfy everyone’s needs, from the first-time visitor to the regional manager and every essential role in between. With the help of AI and other modern smart technology, Qtrac is optimizing omnichannel interactions to boost the customer experience at every touch point. Consider implementing a virtual queue management system so your retail business can maximize satisfaction and revenue in every location.