If you follow what is being reported and printed in the mainstream media, it seems there is no escape from artificial intelligence, or AI if you prefer. Take the recent meeting between Prime Minister Rishi Sunak and tech billionaire Elon Musk; AI was the focal point of the conversation, with Musk warning AI will lead to the eradication of some jobs.

There is little doubt over this statement, with some jobs at higher risk than others, but if we focus in on the retail sector, what might this mean for the market? While we may be some way off robots manning the tills, there are certainly elements of AI beginning to creep into retail. With development of this technology moving at a fast pace, we can expect AI to play a bigger role as we move into 2024 and beyond.

Looking at the current market, there are plenty of examples of how AI is improving retail both for businesses in the market and the consumer. And while talk of robots and threats to jobs may be somewhat discomforting, there is plenty of reasons to be positive about when it comes to how AI can help the industry evolve. 

We may still be some way off robots doing our shopping for us

Widespread benefits if used properly 

Jo Causon, chief executive of The Institute of Customer Service, the UK-facing independent professional membership body for customer service, is upbeat about the relationship between AI and retail. She said why some are understandably concerned about what this might mean for jobs, AI can, if applied properly, benefit everyone.

“There has naturally been a lot of discussion, worry and hyperbole as AI continues to find its way into our lives, whether in the workplace or personal situations,” Causon said. “I believe it’s clear however that, if applied appropriately and for the right activities, AI can add real value – and should not be something to be feared.

“This is especially true where AI is helping retailers to understand customer preferences, channel behaviour, and personal requirements. However, how retailers apply AI is critical to ask the right questions of, and truly understand, the data they have.”

Causon went on to say the future for retailers is about finding the right blended approach of human and technology. She said staff must be trained sufficiently to utilise AI in the best way possible; effectively, efficiently, and responsibly. 

“Any transition by a business to AI-powered customer solutions need to be user-friendly, and the use of personal data and AI should be transparent,” Causon said. “Businesses also have a responsibility to guide their customers through any new processes and tools.

“In short, I believe AI can be used as a tool to improve the service offering, so long as there’s still a person to talk to when the issue can’t be resolved by a machine.”

Businesses should consider how best to apply AI technology to their operations

Looking out for the customer

So, how can AI support retail? Causon said from an operational perspective, AI could help with improving business efficiencies across the retail sector, allowing human time and resources to be directed to the most pressing, sensitive, or complex customer issues.

However, recent research into emerging technology shows AI-enabled chatbots are currently more likely than other channels to cause annoyance. Causon said this suggests we are not quite getting it right currently. 

“Successful businesses are not just using emerging technologies to improve efficiency in the short term; they are using data and AI to monitor, analyse and strategically enhance the overall customer journey,” Causon said.

On the flip side, Causon said there is a case for AI helping more customers self-serve and more businesses get things right first time. She referred to recent figures that show poor customer service is costing the UK economy over £9bn a month in lost productivity. 

“In our most recent UK Customer Service Index (UKCSI), two of the leading issues for retail customers was finding the right person to help and better website navigation,” Causon said. “Using AI-powered tools to streamline these journeys – ensuring the customer gets what they need with ease – could make a significant difference.

“Businesses should also be thinking about how they apply AI to data. Most organisations hold a significant amount of data, and there is often a lack of understanding about what to do with it. AI can be used to equip service professionals with the necessary information – in a timely manner – to provide more informed, data-powered solutions to complex human problems.

“Applying AI sensibly and strategically to your customer operations can help optimise online and bricks and mortar offerings. Whether you’re launching innovative shop floor experiential initiatives, investing in data-led customer personalisation, or creating safer environments for staff and customers with security measures like AI facial recognition, there are a myriad of ways AI can help improve the shop floor experience alongside the online.”

AI could support retailers during major shopping events such as Black Friday

Efficiency during busy shopping events

This brings us on nicely to what may be of most interest to retailers: how is AI currently being used in the retail market. Retail Focus has received plenty of emails on the subject from early adopters of AI in the sector, setting out how AI has helped them improve as a business.

Per Overgaard, chief technology officer for EMEA at Lenovo ISG, is of the opinion that AI will transform the entire retail experience. He added that seamless access to real-time analytics is what will define a retail leader from its competitors on days like Black Friday and Cyber Monday, both of which recently took place.

“Shopper behaviour analytics not only provide retailers with the ability to deliver personalised promotions to shoppers but can also use dynamic pricing or real time promotions to increase consumer spend on these days,” Overgaard said. 

“AI-powered analytics goes beyond online retail. It can also offer insights to enhance store planning by placing goods in more optimal locations and improve checkout intelligence to decrease costly store theft.”

Overgaard said AI applications transcend the shop floor. He explained that analytics from warehouses and stock rooms can allow retailers to be more efficient about ordering products, restocking shelves, and planning logistics effectively, which he said is critical as these operations become the backbone of successful sales periods. 

“If real-time stock levels are linked to shop floor data about purchasing trends, these insights can help the whole business to become more efficient and more streamlined,” Overgaard said. 

“For instance, retailers can use data to understand the number of customers who enter the store at different times throughout the year, and stock their floors accordingly to match this demand. This is a key differentiator for successful retailers in the lead up to busy periods and equips them for successful sales in the build-up to Christmas.”

Panasonic has launched a new AI-powered solution combining personalising advertising with generative AI-based chatbots

Personal experience for shoppers

In terms of physical solutions, these are coming to market thick and fast. In November, we saw Panasonic Connect Europe launch a new AI-powered solution that it said is set to revolutionise retail by personalising advertising with generative AI-based chatbots for customers as they shop.

Developed in partnership with retail data analyst ADEAL Systems, the solution allows stores to automatically monitor demographics of shoppers, combine this information with buying preferences and additional information such as weather or local events, and instantly personalise advertising on displays in the store. 

The solution combines an AI-powered personal shopping assistant ‘CUstomer Segmentation As-A-Service’ (CUSAAS) with retail technology camera and display solutions to bring a next level shopping experience.

It operates using cameras to identify the demographics of those instore. Analysis is provided to the CUSAAS system and combined with additional external information to generate product suggestions. Generative AI-based chatbots design advertisements in real time, with these being delivered via a signage application from FRAMR and displayed on Panasonic 4K displays.

Panasonic billed the new solution as a smart recommender, enabling physical retailers to bring the online experience in-store or create an omnichannel strategy by using real-time data to recommend and personalise communications with customers.

“It’s an ingenious solution that matches the demographic information – never personal data – with buying preferences and other local information to create a new shopping experience,’ said Jens-Michael Pohl, sales engineering manager for Panasonic Connect Europe. “It’s all possible today because of AI. 

“AI in the cameras to identify profiles, AI in the backend system to suggest products and the Generative AI capabilities to instantly deliver personalised advertising. Of course, we always recommend a human check for quality control on the communications before publishing, but it is fundamentally an AI automated system that could use generative AI applications, depending on the choice of the retailer.”

Picking up on Pohl’s reference to human involvement, this pretty much sums up where we are at with AI at present. Yes, it can do many wonderful things and help take the pressure of actual staff, but still requires human touch to operate properly. Combining AI technology with traditional human roles could have huge potential in retail moving forward.