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Have you heard of ChatGPT? If yes, you probably already know the term AI. In fact, in this day and age, everyone knows what AI is and how it will be in the future. 

Coming into 2024, it is clearer than ever how Artificial Intelligence (AI) has been taking over the market. It has become such a vast concept in a very short span of time that it beats the vastness of the word market as well. So, when we say that AI has been taking over the  market, it means the totality of modern markets and future technology. When it comes to the digital world, you cannot ignore the impact and dominance of AI and machine learning. 

The retail industry has observed a significant amount of growth post pandemic. Even though the central reason behind this was the threat of covid, this trend has continued on even after the pandemic. This is mostly because of the convenience of online marketing. The digital market has seen a significant amount of growth in 2020 and this growth has been persistent. The main cause behind this is the power of Artificial Intelligence.

So, if you want to know how AI can help and impact your retail business, this blog is the one for you.

Estimated Growth Statistics of AI in the Retail Market

Let’s take a look at the roadmap of artificial intelligence in the next ten years.

• As of 2023, the rate of AI in the retail market stands at 10.76 billion USD. 
• In the global sphere, AI is valued at 150.2 billion USD in the year 2023.
• Globally speaking, artificial intelligence in the retail market is expected to reach between 45 to 55 billion USD by 2030.
• Between 2023 and 2033, the demand for AI will presumably increase by 28% to 31%.

Factors that Highlight the Importance of AI in the Retail Market

Impact of Covid

The pandemic, no doubt, severely impacted the retail industry. A report by Tata Communication (March, 2020) shows a decrease in spending in the US by 7.5%. To rectify the situation, AI technology was adopted by retailers to increase sales. Even after the pandemic situation came under control, there was little to no decrease in the value of AI in retail.

Recent Trends

For almost all industries, AI has become  an integral part. It acts almost as a transformational force in most industries. When it comes to online marketing, understanding the consumer base is extremely important. Most statistics show that the Gen Z population is dominating the customer base, which has increased the demand of online shopping. It is shaping a new customer experience which is much more suited to the world after the pandemic.

AI Tools Used by Retail Businesses

Whether it’s offline or online, AI technology is being used all across the market. We have some amazing examples of the tools being used. So, if you are looking for references for your retail business as well, keep on reading.

Virtual Assistants

This AI tool has worked its charm on customers. It assists, personalizes and customises the needs of customers according to their preferences. This is one of the best tools you can use to improve customer loyalty. 

Face Recognition

AI tools do not fail to fascinate us further on. Facial recognition tools are being used in online and offline retail stores. But how, you wonder? The middle man is being eliminated to ensure a smooth experience at stores. So, there is no need for waiting in a line in the cash counter, or scouring through multiple things to find what you're looking for. Not only that, facial recognition can also interpret the emotions or the psyche of the buyer and evaluate what products can be pushed towards his/her direction.

Data Analytics

AI tools have mastered gathering patterns and behaviours of customers, and further analysing them. You can use this tool to your best advantage. Using data analysis tools to engage customers, understand their needs and deliver their preferences has proved highly effective. Using  analytics, you need to figure out what’s best for your customers.  By analysing data, you can determine how your strategies have helped your business. Figure out what worked for you and what did not. Adopt strategies in accordance with this data.

Benefits of AI in the Retail Industry

Enhancing Customer Experience and Engagement

AI uses Natural Language Processing (NLP) technology and has introduced chat bot and virtual assistants. This has largely advanced in understanding consumer needs and fulfilling them effectively. Consumers can now expect constant customer support, around the clock. Customer queries are better understood and reciprocated efficiently. By communicating with customers, this technology also improves customer engagement. Through this, retailers can draw data for customer behaviour analysis and understand their preferences.

Personalization

Customers nowadays expect personalization in their online shopping experience. The psychology behind this is mainly because of the inability to choose and purchase items physically. A Salesforce report shows us that 64% of customers expect personalised offers. It also tells us that 52% of customers are likely to change their options if they don’t receive personalisation. AI technology allows us to analyse customer data and provide recommendations accordingly.

Data Security

AI technology can easily detect false data and fraud attempts. With online shopping becoming a vast concept, the risk of frauds and false information has increased. But with various data sources that are used in AI technology to formulate patterns, such complications are easily detected and eliminated. 

Wrapping-up

You, now, must have gathered all you need to know about AI and its authority over the retail industry. It is clearly beneficial for your business in more ways than one. It will improve the effectiveness of ad campaigns, customer interactions and most importantly, data analysis. Companies like Amazon use AI to analyse and collect data based on customer behaviour, wish lists, purchases and so on. Detecting trends and changes in the market can easily be recognized. Artificial intelligence is definitely on its way to conquer the future of retail marketing, and that too, very soon.