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AI creates personalized experiences and new opportunities for brick-and-mortar retailers

Tuesday, Jan 16, 2024

AI is taking the world by storm, and has become an opportunity for brick-and-mortar retailers to create personalized, targeted experiences. During the holiday season, retailers got to see some of the key benefits to AI, with custom product recommendations, content creation and audience-focused marketing. Now, they’re looking to integrate these tools into physical store experiences. 

In December, retail sales were up 3.07% year-over-year. This past holiday season turned out to be more robust than forecasters initially expected. 

“December’s numbers combined with November’s results show retailers had a very successful two-month holiday season,” NRF President and CEO Matthew Shay said in announcing the report. “Clearly, retailers got it right this holiday season,” Shay said.

A key takeaway from the holiday season was the importance of personalized shopping experiences. This will continue throughout 2024, with an emphasis on AI. 

Over the next 18 months, 64% of retailers plan to expand their AI infrastructure investments, according to Nvidia’s first annual State of AI in Retail and CPG survey. And 34% planned on increasing their investments by more than 15%, Nvidia reported.

As a whole, retail tech investments will increase 10% in 2024, according to Chain Store Age. Improving customer experiences is a top priority, along with AI-powered customer recommendations and generative AI. Retailers will continue to invest in smart labels, in-store kiosks, mobile apps, enhanced security and fraud protection, mobile payments, omnichannel solutions and machine learning.

One major prediction for AI in 2024 is to help retailers get the kind of information and insights about shopper behavior in physical stores that they can access from online sales.

Using tools like AI analytics, stores can learn how consumers are moving through stores, and how much time they spend looking at products, and then use that information for better store operations, merchandising, layout, and stock management.

Generative AI will help stores do more on-the-spot product recommendations and information for in-person shoppers via screens in the aisles. AI is powerful for product experiences and if used the right way, can save time and reduce costs. 

BitHuman, a San Francisco based platform developing interactive Human-AI platforms, will have screens with virtual assistants to make it easier for customers to find out the location of a product or ask a question. The screens are equipped with cameras to activate when someone approaches.

“But the real application and opportunity transcends beyond the shopping floor, because now we can create a phygital experience – physical and digital,” Steven Gu, bitHuman CEO and co-founder. “If someone is asking for a product that is out of stock the agent will be able to show the QR code and online links for the customer to purchase,” he said. 

Source: AI Retail Reality – Forbes, Tech Investments – CSA
Photo Credit: AI Retail Reality – Forbes

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