A new era for retail is beginning. Or maybe, thanks to Artificial Intelligence (AI), it’s already begun. At the ‘Artificial Intelligence Expo of Applications’—the forum arranged by Business International dedicated to innovation and emerging technologies which took place in Milan in November—digital marketer Eddi Choi explained that “the present has no time to wait for the future. Because the future is already here”. Even in retail.
Amazon has shaken up the retail world in a significant way, triggering a process that has prompted e-commerce and physical network operators to question themselves. And to invest. What will tomorrow’s retail look like? How many developments will there be? What are the challenges?
It is estimated that Artificial Intelligence will increase retail profitability by more than 60% by 2035.
According to data provided by eMarketer, by the end of 2018 in the US market alone, almost half of e-commerce sales and 5% of all retail sales will go through Amazon. The European market shows a similar picture to these numbers, with customers stopping on average after 4.37 seconds in virtual stores. Clearly enough time to find what they’re looking for. And maybe they were looking for something but they didn’t know they could find it.
The role of AI as a ‘guide’ in this capacity is quite extraordinary. It pays attention to customers and supports them, while offering additional information and services at the same time. This is why the impact of AI is not (and will not be) seen in the automation sector alone. Automation is still a prevalent field, yet modern retail, where information and knowledge come together, is moving increasingly towards engineering and mixed reality.
Tomorrow’s stores will be smart places; physical environments with a virtual presence where technologies including the Internet of Things, and consumer electronics such as sensors, smart cameras and digital assistants will enhance information and emotional understanding capacities, process data for companies and return information to users as a service.
According to Gartner, a multinational corporation and world leader in strategic advice, research and analysis in IT, this advanced use of AI will lead to the creation of more than 2.3 million jobs in the next two years.
The stores of tomorrow are becoming smart places; physical environments with a virtual presence.
Francesco Riganti, marketing director of Mondadori Retail, explained during the Artificial Intelligence Expo of Applications how digital transformation will have an impact on the future of business. Big Data definitely will. Smart Data, especially, is a new way of focusing data, with AI making it more manageable and, as a result, more profitable for customers and companies. Essentially, data mixing is collaborative and, therefore, ‘intelligent’.
Mondadori retail now operates on both the high street and online, with over 600 physical stores, 4 store formats (Megastore, Bookstore, Point and Club) and 4 sales channels (direct stores, franchising, the web and bookclubs), serving over 20 million customers every year, with turnover exceeding €196 million.
Riganti explains that “paying attention to a customer and, above all else, understanding them” is fundamentally important. The advanced use of AI systems, with sets and sub-sets of virtual assistants and human operators, is a winning formula.
In a world where customers are fluid, have multi-channel options and are advancing more and more “we must implement systems to be able to immediately understand what customers want and what they expect”. Nowadays, successful companies pay attention to their customers’ needs. Here we see the importance of “investing in relationships”, where human beings play a key role without the aid of AI.
Human intelligence and AI can come together to stimulate collaborative intelligence, especially in strategic sectors like retail. And, as a result, this will create jobs.
H. James Wilson and Paul R. Daugherty recently wrote in the Harvard Business Review that AI can enhance our analytical and decision-making skills and boost creativity. Intelligent…collaborative: This is the retail revolution.