Can machine learning replace the personal touch of real sales assistants? Retailers are hoping it can.

 

Pricing, promotion, and search top the list of where brands are implementing artificial intelligence (AI) across retail channels.  On average, just over one-third of brand leaders have adopted any AI use, with more popular applications in tailored pricing and promotions and relevant search results, said a recent survey from Deloitte.

 

 

Brands are also investing in people that can help greater adoption of AI. According to a Deloitte survey, brands plan to employ 50 percent more data scientists over the next three years. A 360 degree view of your customers is no longer enough. For retailers to compete and win, they must deliver value in real-time to their customers.

 

Being able to predict consumer demand has huge implications for improving inventory management throughout the supply chain.  AI is seen as one of the best predictive technologies.

 

Machines vs. Human Nature

The question that contrarians pose is whether given that human beings are inherently fickle, to what level of accuracy can AI predict consumer demand - especially for complex products like apparel, where there are many criteria for deciding to buy, and many are very subjective.

 

For example, a customer who prefers blue shirts might reject a certain blue shirt because that specific shade of blue just didn’t resonate with him.

 

A Problem of Privacy

AI relies on data, yet that data is becoming increasingly difficult to get.  While retailers try to collect more consumer data, consumers are continuing to fight for greater privacy. 

 

Right now, consumers are winning.  From “no track” settings on browsers to legislation that amps up consumer data protections (the recent GDPR enacted in the EU), even if retailers are able to capture data, they are finding increasing restrictions on how they can use it.

 

It might not be illegal to note a consumer’s purchasing history and then send them notifications about related products.  However, increasingly consumers are finding this kind of ‘mind reading’ to be creepy, just a little bit too close for comfort.

 

For retailers it will be a balancing act between the need for data to drive AI technologies and the risk of alienating customers who feel that their privacy is being violated.

 

Technology is helping us to do more, and do it more efficiently.  However, as consumers increasingly value ‘experience’ as much as they do the product that they are purchasing, establishing human contact with your customers will remain the gold standard for the top performing retailers. 

 

Not that they won’t also use AI and other technologies.  The winners will use AI alongside personal contact, instead of using it as a replacement.