Artificial Intelligence In Retail Is Already Here

Artificial intelligence (AI) is becoming more and more prevalent in almost every facet of people’s day-to-day lives, from its ability to defeat world-class chess players to its implementation into self-driving cars.

AI is hot, flashy, buzzworthy and is the future of many industries and applications, but many consumers don’t realize the subtle way it is already influencing and shaping the world of retail.

Thanks to an abundance of consumer data at their fingertips, retailers have slowly and subtly begun rolling out applications for many sectors of the retail industry, everything from using AI to offer better product recommendations, to chatbots that can carry on an (almost) lifelike conversation with consumers and help push them toward checkout, to being utilized in image recognition systems.

“The pertinent question isn’t necessarily when but where you’ll see AI deployed. And the truth of the matter is that AI can benefit essentially every step and process of eCommerce, from site layout to personalization to — and this part is extremely important — customer happiness,” Andy Narayanan, vice president of visual intelligence at Sentient, an artificial intelligence software provider, wrote for Total Retail in a piece back in July.

Narayanan believes that AI can be used to provide “real personalization” for consumers. Instead of, for example, just pulling up a page of shoes that indiscriminately lists all the types of shoes a retailer might offer for sale on its website (usually ranked by popularity), AI can be used to personalize that page exclusively to the specific consumer based on the exact pair of shoes they might have clicked on, which can be used to filter for things like color, shade trim, toe type and other uniquely subtle flourishes that might make some of the other types of shoes more preferable to the consumer than the product recommendation pages of retailers not currently using AI.

“With AI, you won’t see this. Imagine instead clicking on a pair of red shoes and being presented similar options, not based on language, but based on the image itself,” according to Narayanan. “Instead of seeing a page of self-same results, you see a curated catalog, all based on the exact pair of shoes you clicked on. AI can look at the subtle shade of red you chose, if there’s a fringe or flourishes, toe type or any other subtle similarities. The more interesting part, though, happens next. With each subsequent click, the AI learns what it is your interested in. It creates threads through your choices. It understands what you want, right then, in the moment.”

Macy’s is one such retailer already testing the retail applications of AI in some of its stores. The department store has been testing an AI-based app, Macy’s On Call, in 10 of its stores across the country. Customers can ask the app questions while in the store, such as “where is the shoe department?” and the app will respond.

According to Total Retail, the app will not just pull from a “script” of pre-selected answers to shoppers most likely questions but will also use AI and machine learning as it evolves and learns more and more information about what customers that shop that particular store are most interested in.

Babak Hodjat, cofounder and chief scientist of Sentient, also recently discussed the burgeoning retail applications for AI in a piece for TechCrunch.

Hodjat said that retailers are starting to use “deep learning” — using algorithms based on a model that has a “deep” graph of multiple processing layers — in retail applications, such as how they classify images, as seen, for example, in Pinterest’s visual search feature.

Another AI technique that Hodjat said retailers are beginning to implement is a process known as “online learning,” where AI is used to analyze each click through an online inventory in real time to better understand customer preferences so retailers can craft a personalized online shopping experience for the consumer.

“Interestingly, as far as consumers are concerned, a lot of these AI breakthroughs will lead to one central concept: adaptive, in-the-moment personalization — AI that can intuit what a shopper’s style is and adapt its recommendations as she or he shops; AI that can evolve a website to specific consumer needs; and AI that can understand user concerns and answer complicated questions,” according to Hodjat. “In other words, at every step of the buying journey, from discovery to delivery, AI will deliver tangible and important advantages for both retailers and their customers. It will make shopping both easier and more personal.”