Computers are better than humans at coordinating and automating repetitive and mundane tasks. The fiery growth of artificial intelligence and its use in the user-facing market has demonstrated that AI is the future of the internet and e-commerce. Almost every technology company, including social media sites, deploys a machine learning algorithm (MLA) to serve content to the right users. Every piece of content that a user sees on any social media platform, from Facebook videos to TikTok’s ‘For You’ page, is determined using a proprietary algorithm.
There has been a significant advancement in artificial intelligence – to the point where it can now choose when and where adjustments need to be made and how to optimize the algorithms it uses to do so.
When it comes to shopping, social media companies already own the algorithm that delivers items in their marketplace and stores. It enables them to sell directly to consumers, a trend currently being adopted in a whirlwind of current events. Hence, theoretically, AI is already selling products to users.
In addition, technological advancements have allowed for the maximum possible benefits of automation in sales to the extent that they no longer need human involvement. AI can handle every step of the sales process, from discovering potential customers to providing them with relevant content. Let’s look at the state of AI in retail.
According to industry experts, global AI in retail is projected to reach a growth rate of 24% CAGR by 2028. Moreover, World Economic Forum suggests AI services will increase from 5 to 31 billion by 2028. The growth of technology will create high-skilled jobs in the technology market and open doors for researchers.
However, this report by the UK government suggests approximately 7% of the jobs could face extinction due to the probability of automation over the next five years, increasing to around 18% in the next decade and 30% in 20 years. A PwC analysis suggests that approximately 500,000 job losses are predicted within the UK, likely to catapult as the technology improves over time.
Technology advancements have allowed for the maximum possible benefits of automation in sales to the point where they no longer need human involvement. AI can handle every step of the sales process, from discovering potential customers to providing them with relevant content.
Different types of AIs are utilized for analyzing data and sales. Some are designed to keep the customers engaged 24/7, reducing the dependency on human operators. Take chatbots as an example. Using Natural Language Processing (NLP), conversational AI can automate tasks such as generating and nurturing leads, onboarding, sending customer reminders, processing payments, and tracking shipments.
The growth of Large Language Models (LLM), such as Chat GPT, a type of NLP, has taken the world by storm. Just as Bing incorporates Chat GPT into their browser, other companies will likely follow suit. This isn’t an average chatbot constrained to answering specific questions, but more human-like and able to have an in-depth discussion, as it learns from every single input.
There are certain aspects of the retail industry where AI has and will possess a long-lasting impact, including:
Customer Discovery – Al can understand what a customer wants to see and perform sentiment analysis to show their desired product. Social media sites widely deploy the technology to serve product ads. The algorithm making recommendations constantly learns from user behavior to improve in its next customer discovery phase. The algorithm then uses a lead scoring system to increase the accuracy of discovering the right customer.
Inventory Management – Large retailers such as Amazon and Walmart are already deploying AI on a grand scale. It helps them provide instant notification of stock requirements, produces in-store and online heat maps, and forecasts when a product sits on a shelf.
Autonomous Supply Chain – While Amazon Web Services (AWS) has long been known for using robots to move items in warehouses such as ‘Proteus,’ Walmart has rolled out their Symbotic Robot in all 42 warehouses in the US. Such initiatives will help drastically improve the fulfillment process.
Amazon uses robots in almost all its warehouses and depends on its algorithm to predict stock count for decreasing lead times.
On the sales side of commerce, AI will speed up many mundane tasks, from tracking to warehouse operations to delivery optimization.
Another excellent example of AI selling products is the Amazon Fresh stores. Fully automated, has no checkouts, and has very few colleagues responsible for receiving the delivery and replenishing stocks. Otherwise, users walk in using a QR code, pick up a product, and leave. No checkouts, no hassle of waiting in lines to pay.
This writer has visited the Amazon Fresh store in Aldgate multiple times and tried many ways to fool the AI. Overhead, hundreds of cameras recognize human movements and track who’s picking up products. Once a customer picks up a product, the AI adds it to the basket. The AI completes the checkout process the second you walk out. After three to four minutes of completing the shopping, a receipt will pop up explaining how much time the user has spent and what they’ve bought.
It’s worth noting that while AI is rapidly becoming the norm in online retail, it won’t be doing so at the expense of people any time soon. Selling a product as an AI in a physical store, completely automated or online, is most likely a decade away. Sales representatives who understand complex human emotions cannot be removed from this supply chain soon. Even so, until Boston Robotics starts selling its robots to Walmart or Sainsbury’s, there will always be a need for people in stores to perform particular tasks. Artificial intelligence may supplement human sales executives in influencing relationships, streamlining processes, and managing forecasts.
Nevertheless, AI’s influence will continue to increase on the marketing front. Scientists suggest that AI is likely to influence marketing strategies, business models, the process of sales, and customer service and even tap into things like understanding complex customer behavior.
Will AI be selling products in the future? It already is, but AI needs more time to reach the level of fully autonomous physical stores without humans. In summary, here are the five aspects that we will see more of in the next five years:
- AI-powered checkouts and fully cashier-less shops will allow people to walk in with a code and simply walk out with their shopping.
- Use of Vision AI and optical image recognition to analyze user behavior in-store and online and improve stock management.
- Use of LLMs such as ChatGPT to humanize chatbot behavior, where AI will have more control over a process, will effectively reduce call centers.
- Increase of retailers using social media and its algorithm effectively to sell products and reach out to customers
- More partnerships between tech giants and retail, such as Google and H&M partnership, will improve the retail supply chain backbone through advanced AI.