Over the next 12 months, Artificial Intelligence (AI) and Augmented Reality (AR) look set to make a huge explosion into the mainstream. We’ve already seen the mass adoption of AR apps like Pokémon GO. After its launch in the UK on 14 July 2016, a staggering 6.1 million adults had downloaded the app just a month later.
Businesses across a whole host of sectors are now exploring how AR and AI could revolutionise the way they operate.
The retail sector is one industry that is leading the way in this technology revolution. With the rise of online shopping and the use of retail apps, our expectations and the way we make purchases are evolving. So, to keep up with these changing buying habits, forward-thinking retailers are recognising the need to adopt new technology, such as AR and AI. Customers already believe that retailers should be investing in AR and AI to offer a more personalised and immersive shopping experience. Apadmi’s Future of Retail report found that more than a quarter (26 per cent) of consumers would like retailers to implement AI tools in shopping apps, and almost a third of consumers (29 per cent) believe retailers should invest more in augmented and virtual reality platforms.
With interest in AR and AI rising significantly, and consumers demanding more from the retail experience, UK retailers are standing on the edge of a new age of shopping. But, how is this new tech going to revolutionise the way we make purchases, and in turn, boost profits for the sector?
Try before you buy
Imagine these scenarios: you’re browsing your favourite clothing brand online and you come across an outfit that looks great. But wait – you don’t know whether it will look good on you, so you’re unsure whether to buy it. Or you’re on the hunt for a new sofa, so you take a trip to a furniture store. You see a couple of styles that you really like, you’ve done the ‘sit down’ test to see if they’re comfy enough, and they’re within your price range – but you don’t know which one to choose as you’re having trouble imagining them in your lounge. Will it suit the rest of your décor? Will it even fit in the space you have available?
For both scenarios, it would be really useful if you were able to actually envisage how the product would be used and how it would look in a real-life setting – whether that’s seeing if the sofa you have your eye on will fit in your lounge or if that stylish outfit will really suit your frame.
This is where AR presents a wealth of opportunities to revolutionise the shopping experience by allowing customers to ‘try before they buy’ without leaving their homes. Customers could use AR to place images of furniture, wallpaper or flooring over a real-world view of the actual room they’re looking to decorate to see if it looks good before they decide to buy it. Or they could virtually try on clothing without having to go to a changing room. This would make for a much more immersive and interactive experience where customers could really engage with a retailer’s products. Retailers would also be able to create more personalised customer journeys, where they can actually see the product in action before they buy it.
Customers are increasingly expecting retailers to invest in this kind of technology to improve the shopping experience. Apadmi’s research found that a quarter think it would enable them to preview product customisations, like different colours, sizes and designs. For retailers, this would help to create stronger brand relations, with customers knowing what to expect from the product, which in turn should convert more sales and enhance profits.
Improving targeted sales
With the use of technology continuing to alter the shopping experience – first, there was the huge shift towards online shopping, and more recently came the rise in mobile shopping and retail apps – customers are looking for a more personalised experience.
More than a quarter of customers we surveyed think the answer to greater personalisation lies in AI. These people would like to see retailers incorporate AI into shopping apps so their phones could remember previous purchases and recommend products and deals based on their shopping history.
Retailers already collect a vast amount of data on their customers through store loyalty cards and online shopping history. So, this is where AI fits in perfectly, because it can help to analyse this information and then make recommendations to guide people through the buying process.
Chatbots are one particular example of a solution that incorporates AI. These systems are ideal for use as customer service assistants or personal stylists as they could tailor online shopping experiences by alerting shoppers to upcoming offers, sale items or purchases they might be interested in.
Or AI could be used within visual searches – shoppers could upload a picture of an item they are looking for, and the system could bring up personalised recommendations based on similar products that are available on the retailer’s website.
The idea is that this technology will be able to act more like a personal shopping assistant that can recognise the customer’s interests, preferences and buying habits. This gives retailers the ability to better target their marketing and sales strategies, while also helping them to save time when it comes to analysing customer data, as this process can be completely automated. According to a survey conducted by IBM, 91 per cent of retailers believe AI has the power to disrupt the industry, and 83 per cent think it will play a critical role in the future of their businesses.
More effective customer service
In the near future, it’s highly possible that customers will be able to walk into a store and ask an app on their phones whether the jacket or pair of jeans they saw online is in stock – rather than talking to another human being. They’ll even be able to go on to a retailer’s website and connect with an online chatbot to quickly receive an answer to their question – maybe they want to know how long the standard delivery time is or when the retailer will be receiving new stock.
The North Face, an outdoor clothing retailer, is just one example of a popular brand that is adopting AI systems. In 2016, the retailer began using Watson, a cognitive system developed by IBM, to offer a more personalised shopping experience to its customers. Using Watson’s natural language processing, customers simply need to answer a series of questions and the system will then use this information to recommend suitable products or provide a solution to their query.
These intelligent chatbots could not only make the shopping experience more efficient, but they could also provide more effective customer service than a human assistant who would need training. They could answer customer queries, or reply to complaints or feedback, therefore saving retailers a lot of time and overall labour costs. And this task automation process is something that is only going to grow over time.
It’s highly likely that AR and AI will play a significant role in technology development over the next few years, particularly given the rate at which it’s progressing and how interest is rapidly growing. For the retail sector especially, both AR and AI seem to have very strong advantages and could really transform the way we conduct our shopping in the near future. As the technology continues to advance and customer expectations evolve, retailers must start investing more in the services they offer to meet shoppers’ needs.
Nick Black, CEO, Apadmi
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