The hype around artificial intelligence has never been higher – and retail is one industry where it has a chance to make a major impact on profits. But as hype and misunderstandings continue to build, it's become harder than ever to keep sight of the true disruptive potential of AI. I recently spoke to Shailesh Jain, Group Head of Analytics and Insights at Landmark Group, to discuss how the retail industry is integrating AI.

Aneshan: Shailesh, where do you see the biggest impact of AI in retail?

Shailesh: We are already seeing the impact across a range of areas, including customer experience, supply chain, personalisation, on-shelf availability and augmented reality. In the very near future, I think we will see AI playing a significant role in transforming and improving customer experience both in store and online, through personalisation, faster response times and increased use of chatbots.

Aneshan: Which AI applications are currently playing a role in automation or augmentation of the retail process?

Shailesh: There are already quite a lot of AI applications being used by retailers. The areas where retailers have started to deploy AI include integration of demand and supply planning. There are AI applications that can make product recommendations to shoppers and simultaneously notify the need to up the inventory to keep up with demand. Also, in supply chain, AI applications are used to optimise routes for deliveries. This has a significant benefit as it reduces delivery times to customers. Chatbots are also being used in several ways to improve customer service. Some of the more mature chatbots can handle up to 90% of customer queries. They can respond to customer questions and even capture emotions. This means that customer service agents can intervene when required, making it a layered process.

Aneshan: Interesting that you mentioned that chatbots can resolve around 90% of customer queries. How does this affect the customer experience?

Shailesh: Well, there are few things that chatbots do really well. For example, they can handle simple, mundane questions extremely well, and they do it with 100% consistency. This consistency creates and maintains a very good image for your brand. One of the key things for retailers is to maintain consistency and quality of products, as well as customer service. Staff cannot be 100% consistent, even though they all go through the same kind of training. Their responses to the same queries vary based on the maturity and the experience of the staff, and therefore causes variation in customer experiences.

That's not the case with chatbots. They will provide the same response to the same query with 100% consistency, and thus standardisation is maintained for your brand. Chatbots make customer service available 24/7 and reduce the wait time on the queries handled by these bots. This means that retailers don’t need late-night staff or office space and don’t have to tell their customers that they are only available between certain times.

Aneshan: How are retailers using technology to stay ahead of the competitors?  

Shailesh: The retailers are not just using technology to serve the immediate needs of customers, but also to predict what they going to need in the future. Demand and supply planning, customer service,  personalisation and customer experience are areas where retailers are using technology to increase the speed of response times to the customers.

Aneshan: What innovations are being pioneered as potential game changers in retail over the next decade?

Shailesh: I think there are a few of those. The first, in my opinion, is facial recognition. I think this is going to change the speed at which the personalisation and the shopping assistance is done today. Emotion recognition is another thing that can be driven through facial recognition. This will drive the regular tracking of customer satisfaction. Image recognition is another big game changer.

Game changers in retail are facial, emotion and image recognition, says Shailesh Jain, Landmark Group Click To Tweet

Aneshan: Could you give me an example of that?

Shailesh: Instead of customers using text to search, they can simply upload an image. Suppose someone might see Beyoncé wearing a dress and want to buy something similar. She can just upload the image and let the image recognition and search do its job and look at every single attribute in the image and try and match it, providing suitable recommendations. From there, the customer can filter the recommendations by, say, price range.

Aneshan: That is mind-blowing. It's so much easier sending a picture of what you want instead of describing it in words.

Shailesh: Yes. In the store as well, technologies like virtual fitting rooms and smart mirrors will take the shopping experience to a whole new level. There are applications that can scan hundreds of thousands of points on a human body in a matter of few seconds through a smart mirror. These can be used to help customers select suitable clothes and get an idea of whether they will suit. This means you can select things that will look good before trying on for the size and fit. It saves time and energy, and that’s good for customer experience.

This conversation is continued in another post, where Shailesh and I discuss some of the challenges of implementing AI in retail.