Five Ways in Which Artificial Intelligence is Transforming the Retail Sector

The applications of artificial intelligence or AI have made exceptional breakthroughs. It has transformed processes for a number of industries including healthcare, finance and automobiles. The retail sector is not far behind. Studies reveal that by 2022, AI can save the retail industry nearly $340 billion. The innovation in processes like supply chain, sales and CRM, manufacturing and payment services can make them more efficient and productive.

The retail sector has been investing in technologies that can make their functions more streamlined and efficient. Online retail giants like Amazon have induced competitiveness in physical stores and caused them to reevaluate their strategies to stay alive. Everything from tweaking the supply chain management to improving customer services to securing the payment processes through a KYC process can be performed through AI-based solutions.

All retail solutions using AI tech are customer oriented and are focused on improving levels of satisfaction. It can enable retailers to increase and enhance their promotional activities in addition to readily answering complaints from customers. Not only that, but it can also reduce frauds like identity theft and credit card fraud, thus increasing levels of trust amongst customers. Some of the ways in which the retail process is being transformed through AI include;

Sales and Customer Service

The retail market has seen a number of innovations and tech solutions for their sales and customer service process. However, few have truly proved to be effective and productive. Nonetheless, artificial intelligence has levelled the playing field. Intuitive CRM software and interactive chatbots and customer service agents are allowing stores to improve both their footfalls and sales.

An interactive customer service robot named “Pepper” was introduced in Japan in 2016. It was aimed at perceiving human emotions to generate positive feedback and gain conducive insights. In certain stores where the robot was tested, a 50% increase in sales was reported by stores along with a 98 % increase in customer interactions.

Another tool by the name of “Conversica” was created to automate sales procedures. The AI-powered sales assistant helps identify authentic sales leads. The software claims to pinpoint authentic sounding leads can generate up to 35% more sales. Companies that implemented the sales assistant in their businesses, reported 30% increased email response rate within hours. It can also be used to follow up on old leads.

Manufacturing and Supply Chain Management

For large corporations, manufacturing and supply chain management is the key function. Luckily, with the help of AI, companies are now able to streamline their supply chain and manufacturing procedures. An AI system designed by General Electric (GE) was aimed at improving manufacturing procedures for an enterprise.

The software, called Brilliant Manufacturing, was built to make every step of the supply chain, starting from design to distribution, more efficient and productive. It uses analytics and operational intelligence tools that can be applicable to a number of different manufacturing processes.

The software comprises of many aspects. One of them is to provide managers with plant-wide visibility of all the procedures to assess the workflow of different operations. The floor manager, using the system, can identify a fault in real-time and move to resolve the issue as soon as it occurs. Other similar systems can be used to track deliveries and intuit if the store is running out of a certain product.


Delivery and logistics procedures form the core of every retail company’s processes. Even e-commerce giants like Amazon rely heavily on fast delivery procedures. AI has lent increased capabilities to logistics and delivery methods that are being used by different companies. The most recent development in this area is the pizza chain Domino’s robotic units. The company says that the unit keeps food and drinks at optimal temperatures during delivery thus ensuring that customers get fresh food upon delivery.

Another tech-driven delivery mechanism was introduced by Amazon in 2016 when it announced its drone delivery system. It was designed to deliver packages for less than five pounds in less than 30 minutes. The company is said to having negotiations with aviation companies and regulatory authorities to determine the proper operating procedure for the drone delivery system.

The system is known as “Prime Air” and is currently going through safety regulations, in order to bring the technology into the mainstream. Amazon is also working with authorities in different countries to take the technology global. Autonomous delivery systems seem to be the next step in advancing the logistics of the retail sector.

Payment Procedures and Security

In the age of e-commerce, customers require their payment systems to be fast as well as secure. Amazon Go is one example of a fast check out system, that enables customers to shop and go. The app allows for a completely automated shopping experience thus eliminating the need for customers to wait in the long check out lines at Point of Sales (POS) terminals.

In addition to that, every online shopper is familiar with PayPal. Such automated payment methods have enabled online consumers to make online payments without any delays. However, until now, security remained one of the key loopholes in the system. Paypal uses complex fraud detection algorithms that can detect suspicious transactions by going through the transaction history of a particular customer or the entire framework. It can detect fraudulent transactions within ample time for the retail owner to stop the transaction on time.

Other fraud detection systems that use artificial intelligence include KYC verifications. They can perform identity verification through real-time document scans and facial recognition. KYC service providers like Shufti Pro are using AI to process user verifications, that can enable the retailer to determine if the person making the transaction is using legitimate details. Thus an effective KYC process can enable retailers to detect fraud in real-time and prevent expensive chargebacks and fines.

Atif Mallo

Atif Mallo is a freelance blogger with huge interest in technology, science, life hacks and health. He loves coffee, cheesecake and chess. Drop a line in comments to leave feedback for him.

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