3 Ways AI Will Transform the Future of Retail

Jeff Yapp
Jeff Yapp
Jun 7, 2019 · 3 min read
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At the Leading Transformation with AI event last May, Microsoft CEO Satya Nadella declared that “AI is going to shape all of what we do.” And one of the key areas where this transformation will take place — in fact, it has already taken root — is the retail sector, which has spent the last several years fending off body blows and head shots from e-commerce and the Great Recession.

However, at least for retailers that are embracing AI rather than recoiling from it, a new dawn is on the horizon; one that will illuminate a new normal where AI-driven technologies, tools, apps and systems elevate retail to new heights of importance, influence and most importantly in the big picture, profitability.

According to Jeff Yapp, the CEO of Portland, Oregon-based consulting agency Wutznxt and a successful marketing professional, here are three ways that AI will transform the future of retail for both buyers and sellers:

1. The End of Errand-Based Shopping

First of all: what is errand-based shopping? It’s basic, small ticket, repetitive retail purchases for products such as toothpaste, laundry detergent, air freshener, etc. Well, in the future shoppers across the country (and not just those deep in digital native territories like Silicon Valley) will offload errand-based shopping to bots built using technologies like Microsoft Bot Framework and Microsoft Cognitive Services, and instead spend their time and effort on items that require some degree of customization or consultation.

According to Jeff Yapp, a major consequence of this change in buying behavior is that manufacturers will no longer be able to rely on traditional strengths like packaging and shelf placement to drive sales. Instead, they will have to find new and smarter ways to create engagement and brand loyalty.

2. Virtual Mirror, Mirror on the Wall

Trying on clothes in a cramped fitting room is time consuming and uncomfortable for customers — which is the exact opposite experience that retailers want to deliver. What’s more, if a desired item isn’t in stock, then customers who don’t want to look at alternatives will walk straight out the door and possibly head straight to a competitor — that’s where virtual mirrors enter the picture.

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Virtual mirrors, which are powered by technologies such as Microsoft Azure, look like conventional mirrors but with a “magical” twist: they allow customers to see how different clothes will look on them. There is no getting undressed, which is a big comfort to many customers and if an item is back ordered or not carried at a specific location, after virtually trying it on customers can purchase it in-store and have it shipped to them.

Jeff Yapp comments that another key benefit of virtual mirrors is the dramatic reduction in shoplifting and related loss prevention costs. This is money that retailers can re-invest to optimize customer experience and drive digital transformation efforts.

3. Goodbye Hard Selling, Hello Smart Recommendations

One of the reasons that many people, particularly those 40 and under, flocked to online shopping and abandoned retail stores wasn’t necessarily to save time or parking lots, it was to steer clear of aggressive, commission-based salespeople and their playbook of pain point tactics. Fortunately, AI has an answer for that. Or that is, an antidote.

That’s because in the future, customers won’t need to brace for impact and shield themselves from the “hard sell.” Instead, they’ll be engaged by automated retail displays and virtual assistants built on platforms like Microsoft Dynamics 365 AI, which provide smart, hyper-tailored recommendations based on preferences, past interactions, purchase history and other granular data.

Jeff Yapp claims that nearly 60 percent of customers see personalized recommendations as value added benefits, which make their shopping experience more pleasant and rewarding. Not only do they buy more, but they’re happier, more loyal and more engaged.

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