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How AI-ML is Bringing a Paradigm Shift in the Retail Industry


The retail industry is fast approaching a new reality. Today, the segment is driven by empowered, tech-savvy customers, who have an entirely new set of behaviors and expectations. They navigate between online and offline channels, blending the best of both, to have an ideal hybrid shopping experience. Most importantly, these new generation customers not only consider convenience and flexibility as absolute must-haves, but also seek personalized services.

For retailers to succeed, it’s a given that the brands who can extend such a consumer experience will stay ahead in the competition. Thus, they are leveraging the capabilities of Artificial Intelligence (AI), machine learning (ML), and data science to elevate customers’ experience by understanding their shopping preferences and brand sales.

Let’s take a look at how these technologies are helping retailers to gather actionable insights and create a seamless, personalized shopping ecosystem.

Enhance Customer Experience

To enhance a customer’s experience, it is important to understand their shopping behavior. Nowadays, consumers are more informed. They research about a product, a brand, possible alternatives as well as the price difference, before every purchase. Applying AI and ML in retail enables the brands to analyze day-to-day changes in consumer behavior with every interaction. These technologies make it easier for them to study factors including consumer’s past purchase trends, preferred price range, and choice of brand, among others. They are also able to foresee what users may shop for in the future, and roll out new products accordingly.

Moreover, business intelligence-backed by AI and ML helps retailers connect as well as interact with their customers and understand their choices/demands. Several brands also use Google or Amazon AI technology to provide users with simple and quick voice search. Together, these are able to provide hyper-personalized recommendations while enhancing overall CX (customer experience). Omnichannel retail strategy is another area of focus for brands/retailers to sell and stay connected with their audience.

Promotions and Personalization

As mentioned, retailers have access to data extracted via AI and ML that they use to provide tailored experiences to shoppers in both, offline and online retail stores. These data-driven insights help managers/retailers in optimizing their revenue. Based on the analysis, the brands can also enhance their marketing campaigns, and offer promotions and discounts.

Improve Store Operations, Inventory & Supply Chain Management

Cutting-edge technologies like AI and ML empower retail store managers to optimize daily operations, track sales, identify consumer and market trends. Moreover, the brands streamline their inventory management by analyzing how demand for certain products is likely to fluctuate in future. Another key component is location analytics that helps retailers to have an end-to-end visibility of all regions and the data in a single dashboard. Now that the companies know their top performing and underperforming stores, they can take necessary actions. Accordingly, they are able to place the right products at the right store in the right amount by estimating the supply and demand. So, integrating an analytical approach via AI and ML is not just improving store performance, but also enhancing employee efficiency.

The retail supply chain is another area where AI plays a game-changing role. With more focus on faster delivery, AI-backed analysis allows retailers to gauge the demand for a particular product, allowing restocking of the same instantly. It further eliminates out-of-stock scenarios and helps the brands keep up with their customer demands.

Intelligent Recommendations

AI and ML help retailers analyze real-time foot traffic, which means they know the number of people entering, exiting, or passing by the store. Besides, data-driven insights empower store managers to forecast rush hours at different hours of the day. This enables them to manage long queues by adding more staff or billing counters to ensure a smooth shopping experience for its customers.

Currently, retailers are embracing new technologies like augmented and virtual reality to turn customers’ living rooms into 3D trial rooms and recreate an offline shopping experience in a virtual store. AI chatbots provide an enhanced level of customer service as they send notifications about new collections, and suggest similar products.


Customer expectations are shifting with e-commerce becoming more experiential, and in-store shopping becoming more efficient. A recent report suggests that the global artificial intelligence in retail market is expected to register a CAGR of 35% between 2021 and 2026. Thus, the future of retail lies in the spontaneity to automate and optimize at a scale to drive offline and online sales.

(The author is Founder Architect & Vice President Engineering, Intellicus Technologies and the views expressed in this article are his own)

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