Future of Smart Retail with AI and Generative AI. Credit - Keymakr.

We are living in a time that could be likened to a new season of Black Mirror. While it may bring about uncertainty, we must accept that the world is changing, and it will continue to do so. While I typically avoid making definitive statements, I would like to share my perspective on smart Retail trends. Specifically, I would like to focus on the core directions of digitalization, personalization, mixed reality, and the unpredictable fantasy flow of Generative AI in smart Retail.

Digitize them all.

It is essential to acknowledge that the next generation’s life is the era of the digital world, where all incoming and outgoing activities will be represented as datasets. These datasets will encompass our purchases, bills, education background, doctor visits and private trips, our beliefs, dreams, and possibly even something beyond our imagination right now. With Generative AI’s advancements, it can recognize not only facial emotions but also our hearts’ emotions and thoughts.

So, what is the relevance between these datasets and retail? Well, these datasets can be analyzed, and the information can be fed into machine learning models. In fact, this is already happening. By mining insights from these datasets, businesses can predict their supply chain costs and identify potential risks or opportunities. Thus, it is crucial for retailers to leverage the power of data analytics to make informed decisions and stay ahead of the competition in this digital era.

According to recent studies, businesses that adopt an AI/ML-based approaches for demand forecasting can expect a 50% increase in accuracy compared to other traditional (human-in-the-loop) methods. By mining insights from marketplace data, consumer behavior patterns, and competitor analysis, AI-powered systems help retailers predict their supply chain costs and identify potential risks or opportunities.

Michael Abramov, CEO of Keylabs. Credit - Keylabs.
Michael Abramov, CEO of Keylabs. Credit – Keylabs.

Retailers are also exploring ways to incorporate AI into their brick-and-mortar stores. Computer vision technology can bring near-real-time intelligence which enables retailers to monitor foot traffic volume and customers’ shopping behaviors (heat maps) in stores. This information can be used for better merchandising decisions such as inventory placement, store layout improvements, adjusting staffing levels based on customer demands.

Many retailers plan to continue investing in AI applications beyond just demand forecasting. Incorporating chatbots for customer service has been proven useful by many companies as it frees up human support staff while providing immediate assistance without any wait time during peak hours of the day or night. Additionally, AI can also extract valuable data from social media platforms that may inform marketing strategy decisions or sentiment analysis which identifies how consumers feel about products or services offered by a company.

The future of demand forecasting lies in implementing advanced analytics driven by artificial intelligence largely because these systems deliver more efficient results than legacy operations using manual methods prone to biases and mistakes made by human error.

Digitalization in the age of AI involves more than just numbers. The transformation also extends to the digitization of warehouses, delivery mechanisms, and even the introduction of human-out-of-the-loop stores. One notable example is IKEA, which has implemented drone technology for night-time store observation and inventory management. With the help of AI, retailers can not only predict purchases and offer merchandise recommendations but also keep track of inventory levels and identify products that are out-of-stock, damaged, or expired.

By leveraging AI in inventory management, retailers can benefit from improved demand forecasting, allowing them to mine insights from marketplace, consumer, and competitor data with greater accuracy. This, in turn, leads to more efficient procurement processes for inventory on demand, ultimately reducing wastage and saving costs. Retailers who adeptly adopt these strategies can win customer loyalty through personalized shopping experiences that reduce instances of stockouts, driven by prevalent demand patterns. Furthermore, this can lead to dynamic pricing models that adjust prices based on customer feedback, resulting in a win-win for both consumers seeking value for money and retailers concerned about profit margins.

I know that we are already living in this reality because we have gone through dozens of relevant applications, creating and collecting the data, and annotating the data on behalf of our clients, I know that it is a real world.

The use of smart shopping carts offers retailers the opportunity to gain insights into the characteristics of consumers. This allows retailers to make better decisions that align with the preferences of their customers.

The global smart shopping cart market is expected to reach $9.7 billion by 2030, with a CAGR of 27.48 percent. There will be even more advancements in these smart devices as technology continues to evolve, such as facial recognition software and personalized recommendations for each individual as the technology continues to advance.

Personalize all.

I’m sure most of you already know how Facebook, Instagram, and Google’s targeting algorithm works. However, I would like to expand your expectations regarding the future of artificial intelligence in retail. Be careful, because AI will recognize your thoughts and generate individual proposals directly to your messengers, virtual glasses or… your mind?

As a result, it will contain all your data: what you like, what makes you excited, what are your needs, wishes, and fears. And based on this knowledge, your virtual assistant will suggest you a complex product opportunity. It will be genuine marketing when you buy not only a product but also your “pain solution.”

Imagine if AI knew you were passionate about math and chess, as well as ‘van Gogh’ and Paris. And all of this could be merged by Generative AI into a capsule decision about your clothing, shoes, and backpack as well. You can fit all of that in one click with AR and VR tools in reality.

And yes, smart fitting rooms and virtual try-on technologies are the future of retail. Virtual fitting rooms are becoming increasingly popular among retailers, with companies like Macy’s, Ulta, and Nike testing the technology. These smart fitting rooms consist of an interactive touchscreen mirror connected to an RFID reader and a motion sensor. As such, customers can virtually “try on” different clothes or makeup before making a purchase.

It will be uniquely you, and it will be made here and now on your fast demand. Delivered by drones or other self-driving vehicles. Or even more fantastic. For one evening, you can fit your avatar in Meta Universe and try something new.

Amazon is building out its capabilities to develop virtual try-on technology in-house. The goal is to allow customers to visualize themselves wearing clothing items through computer-generated imagery (CGI) rather than physically trying them on in-store. Additionally, IKEA has launched its AI-driven digital design experience, IKEA Kreativ. This feature allows customers to design and visualize their own living spaces before making any purchases.

Another example of how Augmented Reality (AR) and Virtual Reality (VR) are becoming popular methods for retailers to interact with consumers is through IKEA’s IKEA Place app. This app allows customers to visualize furniture in their homes before purchasing it.

The future of AI in the smart retail industry is set to revolutionize the way we shop, sell, manage and create new reality. We are one step away from opening the door to meet face-to-face with our deep inner ideas we were afraid to open, even for ourselves.

A wild, strange virtual creature will represent our unique individuality. And all of those crazy things will force us to break the old retail and replace it with something new: flexible to new options.

Whoever is aware is ahead of the time.

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