The Artificial Intelligence trends of 2020 for the retail sector

We don't need a crystal ball to predict that Artificial Intelligence is becoming increasingly important in our lives. Today, the technology is being used in more and more aspects for fraud prevention, e-mail categorization, credit determination, search optimization, chatbots and virtual assistance such as Amazon Alexa. Artificial Intelligence can also mean a lot to your organization.

Many e-commerce companies already use aspects of Artificial Intelligence to understand their customers better, generate new leads and offer an improved customer experience.  Do you also use the following trends? These will only become more important. In this blog, we provide insight into the most important trends of Artificial Intelligence for the retail industry which can help your company grow. 

Trend 1: Sales process with virtual assistants

Today there are only a few companies that use cold calling as a sales technique. Many companies now use advertisements and social media channels to reach their target audience. And today's pioneers use applications such as Dynamic Pricing, Forecasting, chatbots etc. to realize a more effective sales process. An important trend is that Artificial Intelligence can be integrated into the CRM (customer relationship management) of your organization. For example, many AI systems make language teaching and voice input possible, such as Siri or Alexa. This allows a CRM system to answer customer questions, solve their problems and even identify new opportunities for the sales team. The North Face, a major e-commerce retailer, is a good example of that. The company uses AI in the sales process to better understand its consumers. By using AI they enable online buyers to find their perfect jacket. For example, they use AI technology for voice input to ask the customer such as: "Where and when will you use your jacket?" The software then scans hundreds of products to find the perfect match based on real-time customer input and own research, such as weather conditions in the area. This means that the customer will quickly see the perfect product and does not have to perform all kinds of searches. 

Artificial Intelligence gives customers faster access to information. This is necessary in a world where customers expect to be helped quickly. Therefore virtual assistance becomes more important. Amazon also uses a virtual assistant named Alexa. Alexa has recently emerged as one of the most prominent voices in the e-commerce industry. The system has been successfully integrated into Amazon's own products and into products from other manufacturers. For example, with the help of Alexa on the Echo-device from Amazon, you can discover local performances for the upcoming weekend via StubHub, arrange transportation to and from the event via Uber, or even pre-order food from Domino's (and the status of the order) real-time tracking. 
Thanks to AI your company is able to meet the customer needs faster.

Trend 2: Personalization and privacy

When it comes to personalization, there is often a concern that it will conflict with the privacy of your customers. After the AVG entrance, strict requirements are attached to this. There is a possibility for retailers to solve this problem. The answer is Artificial Intelligence. You have to ensure that customers realize that you only want data from them for their own purposes. After all, users are more comfortable sharing their data if they really get something valuable in return. For example, if you give Google Now access to your account, then your calendars, e-mails and search behavior are synchronized. Every morning the system will greet you with a short briefing of your day. As a result, the users actually get something valuable back and they are happy to give out their data.

Trend 3: IT automation

We all know Marketing Automation, but IT Automation is a trend that we will see more and more in 2020. Instead of automating the marketing activities, this is about automating the IT activities of your organization with the help of Artificial Intelligence. According to a study by the Harvard Business Review, 44% of the companies in the global Harvard study said they used AI to detect and resolve security breaches, while 41% said they used AI to resolve user technology issues. Another 34% said that they used IT Artificial Intelligence to reduce production management through automation. These numbers will only increase. For example, AI is a handy tool for detecting hackers and keeping your organization safe.

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Trend 4: Image recognition

AI made it possible for computers to understand speech, such as Siri and Alexa. Did you know that we can also learn computers to see? Image recognition refers to the ability of computers to acquire, process and analyze data from visual sources. There are many applications for image recognition, including the ability to diagnose diseases, detect license plates and enable photo analysis to complete payments or other verifications. It can also help companies improve their marketing. GumGum uses its own computer vision technology to scan images and videos from millions of pages on the internet, allowing brands to place relevant ads where users are likely to see them. This means that the right target group is reached and that gives your organization a major advantage.

Trend 5: Forecast returns

Thanks to Artificial Intelligence, it is possible to predict which products will be returned the most. This gives you insight into which drivers (website information, logistics process, customer behavior, and product information) determine returns and how you can reduce those returns. This saves you a lot of high costs.

Trend 6: AI customer service

We already mentioned virtual assistance as part of the trend to make the sales process more efficient. On the other side, it is also a big trend for customer service. For example, in recent years many companies, large and small, have started using chatbots. This AI-driven tool can answer the questions of the visitors of your website, qualify leads and help customers check out. We expect to see more progress in AI-powered customer service in 2020. Companies will not only use chatbots, but they will also create virtual agents - with a face and personality that match with the company - that can handle even more customer service tasks for your company. For example, Autodesk’s virtual agent Ava is a female face and voice that speaks in a way that matches the company's brand. It is more successful than their previous chatbot because the team invested time in creating a persona. We expect more companies to invest in lifelike AI-based virtual agents in 2020 to continue engaging in engaging conversations with customers.

Trend 7: Dynamic Pricing

Dynamic Pricing is an AI model that can change your pricing strategy. It is able to calculate a certain price based on different input variables. For example, variables such as season, country and customer profiles can be added to the model. This also adjusts the price of the products to the size of the demand. For example, Dynamic Pricing is often used to predict the optimum price for the leading products (Key Value Products) in order to allow the total order value to grow in the margin. The three biggest advantages of this AI solution are: 

  • Higher turnover
  • Higher profit margin
  • Higher customer loyalty

Do you want to know more about what the possibilities are for your company?