Retailers Turn to Artificial Intelligence to Grow Sales

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Macy's On Call IBM Watson

It is getting easier and easier to buy goods online and have them delivered to the doorstep quickly—a fact that has been hurting brick-and-mortar retailers for years. Now, real-world retailers are turning to the digital world for help in the form of artificial intelligence. Businesses such as Macy’s, Asos and various luxury businesses are testing AI and using it to help retain customers.

With brick-and-mortar stores, it can be hard to locate salespeople sometimes and Macy’s has decided to use artificial intelligence developed with IBM Watson to help customers out. The retailer is testing one mobile tool in five locations that will let shoppers ask their phones if a product is in stock or where a particular brand might be located in a specific store. In five other stores, it is testing a Macy’s On Call tool that will summon a nearby sales associate. The tools will keep “learning” about customer needs and feeding info back to the retailer, the Associated Press reports. In time, it will be able to sense when a customer is frustrated with the information being given and will then notify a sales associate (who will hopefully have been well trained on calming annoyed customers). Amazon.com, by the way, is expected to pass Macy’s in clothing sales next year, so the retailer now has extra incentive to figure out a new way to retain its customers.

Watson isn’t alone. Another program, called Metis after the Greek goddess of wisdom, is being used to help luxury retailers learn more about their customers. (After all, what better way to make luxury customers feel special and than have Big Data identify desires before they even know they exist?)

Metis gathers info from customer actions and reviews. At this point in time, it seems, people are listening. “It’s not what the data tells you; it’s what you do with what the data is telling you that makes the difference,” writes Ana Brant, the director of global guest experience and innovation for London-based Dorchester Collection and a member of the Metis advisory board, in the Harvard Business Review. “Can you resist the temptation to standardize, and use the data to uncover what makes your business unique? Big data is helping us move from what we think is important to what the customer thinks is important.”

Other retailers are also taking advantage of AI. “Fundamentally, AI transforms how brands and retailers interact with customers and customers with brands,” Sam Vasisht, chief marketing officer at artificial intelligence platform provider MindMeld, told Women’s Wear Daily. “The relationship goes from transactional to conversational. Every interaction—be it via a web site, app or messaging platform—becomes more intimate and personalized. Retailers and brands gain heightened insights into customers and their behaviors, shopping patterns and sentiment. This allows businesses to better manage the customer relationship, personalize their offers and create memorable brand experiences.”

Meanwhile, European online fashion retailer Asos is working on artificial intelligence and voice-recognition technology to help it identify and adapt to changing shopping behaviors. “We want a Siri on steroids to inform customers when a dress is back in stock,” Nick Beighton, chief executive of Asos, told the Telegraph. Asos has its own Amazon issue to deal with as the Seattle-based brand has recently gotten into fashion. Beighton noted that he’d “never be complacent about Amazon, (but) they are a very different beast.”

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