From assembly to customer interactions in the after-sales stage, Artificial intelligence has made advancements across industries and businesses. Focusing on the retail sector, AI technology has entered the entire lifecycle of products and services. In the retail sector, this technology is gaining importance and is being applied in a variety of ways across platforms without seeming overtly obvious to the customers. Even though AI is accompanied by high costs, it can benefit your business in a number of ways
Before we discuss the role of AI in retail analytics let us take a look at how Artificial Intelligence works? AI processes big data through algorithms like a neural network and subsequently provides answers in a manner that a real person would. The answers are based entirely on the findings from the data that was provided. In the retail industry scenario, the AI is fed the sales data which is linked to the client data. The AI model thus produced is aimed at providing information and insights about customers, inventory, and business-related financial figures which are otherwise not apparent. Such insights can help the business owner improve on the business strategy, inventory management, queue management, customer support services, etc. Contrary to popular opinion, AI is not to be considered as a business-wide venture. In fact, it can be implemented in specific fields like queue management or people counting to improve your business.
The AI-Retail Partnership
Artificial Intelligence technology can be used for a variety of applications in the retail sector. For any business in the retail sector, collating and intelligently processing customer data is a top priority. Depending on the ensuing results, the business can redefine its strategy that is in line with the buyer preference. Generating and assimilating data is the easier part. However, the complicated part is to read and analyze it correctly. This is where AI comes into play. With AI tools, the retail business can draw accurate conclusions and formulate more effective strategies. Let us explore in more detail how exactly can AI benefit retail analytics.
Video Surveillance Analytics
Buying patterns, customer behavior, and digital signage are seen as areas where AI can offer drastic improvements. AI-enabled video analytics can actually help businesses determine their standing vis-à-vis where they want to reach. Video analytics has been looked upon as an important tool since before AI entered this sector. However, up until now, video surveillance was just limited to capturing data regarding spending behavior, browsing pattern, etc. The retailers would act on this data to improve the overall shopping experience for their clients. With the entry of technologies like AI video analytics, the retailers can actually assess the product exposure level that is experienced by their clients.
Accurate traffic counting can deliver data that can help you grow your business and keep your customers happy. Apart from your store, it is also important to know the areas that your customers frequent to know their personalities and predict their buying requirements. People counting is an excellent method to derive this information. An intelligent traffic counting system can provide daily insights into your target market segment’s preferences and shopping patterns. The deep learning-based AI methodologies can give you precise insights and answer your urgent business questions. Ultimately, you are making decisions based on factors like the frequency of a shopper’s visit, the duration of these visits, etc.
Interestingly, Footfall counting in retail can also be considered as a security strategy for your business. For instance, you may have more than one entrance to your store and the largest entry footfall is through the door located near your accessories section. So, if you are suffering from an increase in shoplifting or theft of accessories, then you might consider closing that specific entrance or posting more people to keep an eye on idling visitors. Either way, you can make your store more secure with the help of footfall counting video analytics. Some prominent benefits of people counting are listed below.
- Visitor analytics – Businesses can collect valuable data by placing Visitor counting devices at strategic locations within the store. The analytics help find a better correlation between physical locations and customer interactions.
- Conversion and sales optimization – Footfall counting in retail gives owners a better picture of lost sales opportunities. You can take appropriate measures to reduce this percentage and increase your conversion rates.
- Marketing effectiveness – The analytics generated from footfall counting in retail can also help business owners assess the effectiveness of their ad campaigns. The traffic counter devices can provide information on how many people walked into the store and how many walked past it when a particular promotional campaign was on.
- Efficient operations – Overall, the visitor counting technology is designed to help stores run more efficient operations. The data and analytics that get generated with the help of AI can direct the store owners towards making corrections that can be beneficial for their business.
Queues at the check-out counter have always been considered as an inherent part of the retail sector. However, this history does not make it any less tiresome for the customers. With an effective queue management system, you can provide your customers with faster moving queues even in peak hour traffic times. The end-goal of the client is to make a purchase and that of the retail business is to sell. Standing and waiting in a queue is not why customers come to your store. In fact, poor queue management in retail sector can mean a slow death for your business. A retail business owner can experience nearly 40% of revenue loss as a direct result of failing to eliminate long queues. An AI-empowered queue management system has the following benefits.
- Increased efficiency – Effective queue management results in lesser crowded checkout lanes. This allows you to distribute your staff more evenly throughout the store resulting in enhanced customer experience.
- Accurate analysis – You can use the queue management analytics and find out exactly how many shoppers checkout at each queue. With proper queue management in retail sector, businesses can also find out the average time that a customer has to spend waiting in the queue. This can help you improve the checkout process. Queue management thus helps businesses decide the acceptable queue length and waiting time.
- Abandonment prevention – Improvements in the customer experience as a result of the AI retail analytics in queue management increase the number of satisfied clients that come to your store. These steps in improving queue management in retail business can help reduce and prevent instances of cart abandonment.
Increased loyalty – Competition in the retail sector has moved beyond sales and discounts. The customer experience is a major determining factor whether your customers will become loyal or not. Loyal customers generate periodic revenue for you. An efficient queue management system can lead to good customer experience and build product loyalty. Increased loyalty combined with effective queue management can ensure that your customers return and leave with more purchases because of their good experience
Apart from footfall counting and effective queue management, product and store layout also plays an important role in increasing revenue generation. The manner in which a retail store displays inventory can define the customer’s buying pattern. However, there is no single universal formula that can be applied to every store to achieve the best conversion rates by simply displaying items properly. With AI analytics, you can feed in the sales data and discover customer buying patterns and preferences. AI analytics can also guide you on which products to display next to each other to entice customers to buy more. Since businesses can use AI analytics to gain pricing planning as well, the retail store can ensure that contrastingly priced products are not placed close to each other. Further, automated warehouse management can reduce human-related errors and bring down the mistakes affecting your bottom-line revenues.
These last few years have seen tremendous advancements in the Artificial Intelligence space. Its application in the retail sector has helped businesses sell better as well as retain happier customers. However, the technology is inaccessible to most small and mid-sized companies as softwares are proprietary and costly. While it might seem like a substantial amount of investment initially, but the intelligent analytics that is generated can help businesses grow multifold. In the long run, the benefits will far outweigh the costs involved.
About AIndra Labs
With the help of intelligent factors like queue management and people counting, AI surely presents the retail sector with an opportunity to respond faster to the changing customer dynamics. Since the data analyzed is actual and live, this can ensure that the business is always ahead of its competitors. As one of the top 10 Indian AI startups, AIndra Labs is focused on developing cutting-edge Artificial Intelligence products and solutions. AI-empowered platforms and solutions delivered by the Aindra team are enabling businesses to extract more revenues from their existing investments. AI in retail is viewed as the domain of big and large corporations due to the costs involved. The experts at Aindra Labs are making their industry-grade AI capabilities available to smaller players and helping them change the dynamics.