3 Areas Where AI Can Improve Retail Operations

Brian Gallagher

If I had to pick a single game changer in retail, hands down it would be AI applications. During my 20 plus years as a retail leader, I saw a lot of change, but all that change had one thing in common—it was all linear and driven by human experience and expectation. I can’t count the number of times that our senior management teams would say, “This is a good first step” when, in reality, we needed to take leaps or even a complete shift in direction. Experience is always important, but it is also limiting. What we were really missing was the ability to takes flying leaps instead of tiny baby steps. AI has changed how retailers will win going forward.

Every retailer can apply AI solutions to one or multiple parts of your business today. AI engines simply need data, and as retailers, we have more data than we ever knew what to do with it. The good news is this past and future data collection can finally be put to good use. AI needs to be integrated into every facet of our retail business model—and here is how it might affect your business.

Customer Experience

Every retailer, from the smallest boutique to a global mega-retailer, can use AI to help customers find what they need quickly in an omnichannel supported way. AI allows customers to get assistance the minute they need it, whether it be product information, virtual fitting rooms, or customer feedback.

These experiences can manifest themselves in any number of customer touchpoints including mobile devices, digital signage, or voice-bots. Digital signage using computer vision can also measure customer engagement and serve up real-time advertising that speaks to the audience. POS system captures data about what was purchased that is used to generate new product recommendations. Digital signage collects data about which types of customers are shopping and when, so that merchandising can make better decisions about product promotions. All this leads to more accurate segmentation and experiences that are tailored to a customer’s patterns and preferences.

Employee Productivity

In a retail world where employee availability is forever changed, the ability to use AI across the entire employee journey can provide huge returns. An AI engine can more quickly and accurately identify the best candidates to interview or even identify unique locations for resourcing employees. But even past the hiring process, AI completely changes how an employee is trained, which delivers more effective learning and faster onboarding. The ever-active motion of hiring and training can be deployed faster with better results.

Once an employee is hired, AI might have an even bigger impact on employee performance and job satisfaction. AI solutions can improve productivity by simply eliminating the unnecessary, anticipating the necessary, and modifying the motions. A productive, engaged employee will always work harder—leading to longer tenure, less turnover, and higher customer satisfaction.

Supply Chain Demand, Planning, and Logistics

It makes sense that a better understanding of trends and driving factors can improve your ability to anticipate demand and react accordingly. AI helps retailers improve forecasting, make pricing decisions, and predict future trends. AI analytics can help you order the right amount of stock so that stores won’t end up with too much, too little, or either in the wrong location. Omnichannel data provides a maximum benefit to the supply chain. AI can truly see trends that the human brain cannot normally comprehend and certainly not as quickly. Maintaining an accurate inventory is also a major challenge for retailers. By connecting data from more parts of the omnichannel business and applying AI, retailers gain a comprehensive view of the entire supply chain.

AI in Retail Operations: Trust and Understand the Outputs

There is one huge difference in each of these experiences compared to the past. There is no human programming or human anticipation. The days of product teams deciding that a customer that buys white sneakers probably wants white socks are gone. The AI engine has looked at every piece of data imaginable and can decide what to promote based on customer demographic, time of day, micro-location, and a million other factors that the human brain could never begin to absorb.

Trust your AI. Understand and trust your outputs. As leader, we all want to rely on our experience and work in our comfort zone. The investment in AI for your business will provide tremendous benefit, but only if we trust the decisions it produces.

For more information about how Connection and our partners can help improve your business through AI or other technologies, please visit us at connection.com/smartstore or connection.com/retail

Brian is the Retail Strategy & Business Development Director at Connection. Brian joined Connection in 2016 as the Retail subject matter expert (SME) after leading National Store Operations teams for more than 20 years. Brian has a deep understanding of today’s Store Experience and Customer Engagement solutions requirements and works collaboratively with customers and partners to create complete business solutions to drive customer engagement and revenues. Outside of work, he enjoys traveling with his wife and cheering on the Cleveland Indians.