Customer Service Robots, Logistics, and More: How AI is Transforming the Retail Landscape

AI and machine learning have already changed the entire retail ecosystem as we know it, and more dramatic changes are underfoot. AI in retail can help marketers ...
Updated on January 25, 2023

Consumers today are more self-aware, more demanding and more discerning than previous generations. Today’s shoppers are what consumer behaviorist Ken Hughes calls “blue-dot consumers” – that is, shoppers who are used to getting what they want, when and where they want it. To win in today’s consumer landscape, businesses must understand the new consumer.

Businesses must deliver personalized, targeted, and omnichannel shopping experiences both online and in-store. To stay ahead and the game and deliver, brands and retailers must use the data they have at their disposal to get the most out of artificial intelligence driven solutions.

Here are four ways AI is transforming the retail landscape today:

1. Improved Customer Service and Efficiency

AI isn’t just about improving customer experiences in the digital space, brick-and-mortar stores are already changing the way they approach customer service thanks to AI technology. Home improvement retailer Lowe’s, for instance, rolled out the LoweBot, a friendly robot programmed to not only help customers find products but also assist employees with inventory scanning.

More recently, Japanese company Softbank’s Pepper, a customer service robot programmed to chat with customers, give directions, and answer questions, proved to increase foot traffic by 70% and sales by 13% in two separate pilots.

2. More personalized product recommendations, more revenue

According to Salesforce’s Personalization in Shopping report, shoppers who clicked on recommended products spent five times more per visit. More precisely, “Visits where the shopper clicked a recommendation [on a retailer’s website] comprise just 7% of visits, but create 24% of orders and 26% of revenue.”

The Salesforce report also states that people who clicked on a product recommendation were more likely to spend upwards of 10 minutes more on the site than shoppers who didn’t. AI helps retailers by considering a user’s preferences in the moment, as well purchase and browsing history.

Sometimes, that might be the most popular handbag on the site and other times, it could be a product buried on page 30 of the results, but AI can help bring the products the shopper is interested right to the surface, making the entire experience more efficient for the retailer and more personal for the shopper.

3. Improved inventory management, logistics and delivery

AI in retail

AI can not only help increase sales and customer satisfaction front of house, it can also solve for a lot of logistical headaches that happen behind the scenes. Previously, logistics and merchandising teams could only roughly guess at which products and how much to keep on shelf using historical sales data and inventory levels that had not been recently updated.

With AI, logistic teams have a much clearer picture of what’s likely to sell since the algorithms can take into consideration trends, weather, consumer behavior, and historical sales to put together an order that’s much more predictive. This improves a retailer’s inventory management and logistics, and then opens up the door to improve last-mile delivery.

While the widespread use of drones might still be a bit far off, grocery chains like Kroger are already rolling out self-driving cars to deliver groceries and advanced robotics are proving to be much faster and more accurate at sorting both mail and inventory, leading to shorter delivery times and ultimately, happier customers.

4. Facial recognition AI for loss prevention and innovation

Facial recognition as a technology has been around as early as the 1960’s, but it’s only in the past few years that brands and retailers are using it to take their marketing tactics to the next level. Japanese skincare brand SKII recently used facial recognition software as a part of an immersive digital experience called “The Art of You” to analyze shoppers’ facial features and skin to create a personalized skin journey that helped build brand awareness.

AI is the Future, AI is now

The talk has always been about data, but now the focus is on how to turn the data into intelligence. AI and machine learning have already changed the entire retail ecosystem as we know it, and more dramatic changes are underfoot. AI has and will continue to help marketers use the data they have in order to increase brand awareness, better understand shoppers, improve customer retention and loyalty, and increase revenue.

For some marketers, that means partnering with a tech partner like Criteo. Our recently launched Criteo AI Lab brings together both Criteo Research and Development and Criteo Engineering to develop and integrate new and state-of-art AI research into our production systems as well as to push forward our common understanding of AI techniques.

With an investment of €20 million over three years, this AI Center will deepen understanding of the relationships users have with the products and brands they interact with. With data from 1.4B monthly shoppers interacting with a few billion products across 18,000 partners across multiple countries, we’re aiming to take our predictive performance to the next level.

To learn more about how Criteo is helping brands and retailers use data to bring shoppers the things they need and love, check out what we’re working on now at the Criteo AI Lab.

Get Started with the Criteo Ad Platform

Betty Ho

Originally from Orange County, CA, Betty moved to New York in 2013 for a two-year creative writing program and never left. When not writing for Criteo Insights she can be found at a handful of $1 Oyster Happy Hours in Manhattan. She loves dogs but doesn’t have one.

to our newsletter

Fresh sales trends and consumer insights to help
you plan and win.