5 Significant Ways AI is Changing the Retail Industry
From stock management to customer service, there are many ways that AI can benefit small businesses and e-commerce retailers.
Unfortunately, many small business owners consider the implementation of artificial intelligence (AI) a daunting challenge. According to an article found on Inc.:
“It’s easy to dismiss AI as a complicated and slightly alien tool that can only be used and understood by computer scientists and other experts at big tech companies, but this attitude is mistaken. In reality, there are many ways small businesses can take advantage of AI right now. And they shouldn’t wait – their competitors certainly won’t.”
The truth is, AI is a lot like any other technology. With more and more companies developing AI applications, the increase in competition and adoption is driving down costs, making AI accessible to a more extensive range of businesses.
Here we take a look at how 5 ways your business can take advantage of what this innovative technology has to offer:
1) Efficient backend processes
Many backend tasks, including basic accounting, inventory management, scheduling, and other forms of day-to-day organization—can be a Godsend. Small businesses typically have a limited number of employees, and the transfer of time-consuming tasks to AI helps them use their human capital more efficiently, suggests Inc.
Inventory management, for example, can be a monotonous task that is also time consuming and imprecise. And worse, bad inventory management can leave significant amounts of stock languishing in storage, or, conversely, lead to missed sales opportunities due to being understocked.
But advances in AI mean that inventory management can now be carried out by an automated system that is able to accurately predict how much stock needs to be ordered based on likely sales and previous figures.
Relying on AI to take care of backend processes also frees up employees so they can do more meaningful work.
2) Data collection & targeted selling
Sure, AI is indispensable for large companies that have access to mind-boggling amounts of consumer data, but it’s also crucial for small businesses seeking to gain meaningful insight from more modest bits of information.
“When small businesses have access to sophisticated statistical tools, they can learn more about their customers and discover new ones,” says Inc.
Machine learning can help you collect, store, and analyze data about what specific types of customers are likely to buy. These are based on a huge range of factors, including which pages they have visited and how long they have looked at a specific category. From there, you’ll know how to target the right audience at the right time and have a much better shot at scoring conversions.
From determining what keeps customers coming back to your business to helping you calculate new market niches, AI is a versatile tool that is now available to businesses large and small.
3) Effective marketing strategy
An Inc. survery revealed that 93% of marketing researchers believe AI presents a great opportunity for their industry. Eliminating the need for employees to do mechanical tasks like data preparation or advanced data analysis is just one reason AI is fundamentally changing the marketing world.
Where small businesses used to be limited to whatever ads they had a budget for in local markets, today they have the ability to reach an extensive audience online. As you know, you can use AI-based advertising platforms—developed by mega companies like Facebook and Google—to target specific consumers that will be more receptive to your message. Plus, you can collect and analyze consumer data from multiple channels—without a team of marketers.
AI is also having a huge impact on search engines and search engine optimization, and it is only a matter of time before this begins to affect e-commerce. For example, Google’s AI system RankBrain is now one of the most important features in the search engine’s algorithm.
One of the specific things it does is to test how users behave on certain pages, so that it knows where to rank them. RankBrain places a page different in the ranking than it ‘deserves’ to be, under their current algorithm, and then measures how users act on this page. The goal is to provide customers with the best possible result, so if a weaker page actually serves a customer better then it may deserve to be higher.
But this is not the only way that AI is changing search. Voice search is becoming more prominent and sophisticated, and much of this is down to AI. Using machine learning, Google is able to more easily recognize and understand the intent behind a search query, which should provide better results.
This means that e-commerce businesses need to adapt their SEO efforts so that it takes into account AI advances. In fact, according to an April 2018 McKinsey report, the impact of AI is “likely to be most substantial in marketing and sales.”
As a small business owner, you should start implementing AI now if you want to reach as many consumers as possible in the future.
4) Improved customer experiences
Never before have companies had more ways to interact with their customers. The eruption of communication channels online, paired with consumers’ demands for more engagement than ever before, has made it necessary—crucial, even—for companies to develop new ways to speedily address their customers’ concerns.
In fact, Gartner predicts that at least one quarter of customer service operations will “integrate virtual customer assistant (VCA) or chatbot technology across engagement channels by 2020.”
AI-based communication offers unique benefits for small businesses that can’t pay operators to answer calls or emails whenever they come in. Chatbots, for example, can assist customers whenever they need it and immediately answer inquiries from potential customers, allowing small businesses to improve customer experiences while generating new business at the same time.
As chatbots and virtual customer assistants become more advanced and are able to handle simple customer service interactions, they can free up your human staff members to get on with the more critical aspects of their roles.
5) Better hiring processes
“Small businesses face unique challenges when it comes to finding and recruiting top talent,” says Inc. After all, big companies not only have name recognition, but also huge networks, and more resources to throw at job seekers. Additionally, they have HR departments to move qualified candidates from interviews to onboarding as quickly as possible.
But AI is a great equalizer in the hiring battle. It used to be that recruiters had to manually sift through vast piles of resumes and and cross their fingers that they’d find a good candidate, AI has streamlined that process.
Machine learning algorithms can actually determine which hiring practices are the most effective, while other AI applications can determine what types of communication will appeal to specific candidates and inform recruiters about the details of a candidate’s work history.
These innovations can improve your hiring operation and help you compete with much larger companies for better talent.
Artificial intelligence is changing small businesses and e-commerce companies in the retail industry in a huge variety of ways, five of which we covered above. It is important to have the flexibility to move with the times and find solutions that take into account the changing AI landscape.
>Indeed, as AI becomes more popular among companies of all sizes, it will become absolutely critical for your small business to take advantage of what this revolutionary technology has to offer, especially—suggests Inc.—if you want to reach as many consumers as possible in the future.
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