For all the chatter in the past year or so about the role of AI in the consumer economy, its potential impact on the brick-and-mortar shopping experience is only just taking shape.
Opinions, of course, are divided.
Major chain retailers have been investing heavily and are just beginning to roll out early iterations of in-store AI “shopping guides,” digital tools and features focused principally on making the physical experience as frictionless as e-commerce while retaining—and possibly enhancing—the personal touch.
Some suggest that AI will be the “starting point” of all shopping experiences…
Of course, experts have been predicting a twilight future for in-store shopping for years and it still hasn’t happened. But, will AI be the “tipping point”?
While the pandemic did provide e-commerce with a burst of rocket fuel, most brick-and-mortar retailers have since figured out how to compete (or partner) with Amazon online.
Once the Covid crisis peaked, humans went back to doing what humans do—driving to the store where they can touch the fabrics, read the labels, and squeeze the fruit. People like to browse and discover things they didn’t know they needed or wanted.
Meanwhile, far from trending toward retail domination, US e-commerce growth is flattening. According to recent Commerce Department data, the rate of increase in online retail sales was the slowest in almost three years. The e-commerce share of all US retail sales was 16.4% in the third quarter, an increase over three years of less than 2%.
AI may naturally lend itself to e-commerce, but AI also has enormous potential, using chatbots and personalization, to make the in-store experience better than it has ever been. By doing so, AI can actually be a loyalty builder. The possibilities are only limited by the imagination.
For example, many big box retailers already maintain online store maps that a customer can use to quickly find which aisle has the item they’re looking for. Go to the store app, search for the item, and a map of all the aisles pops up with an arrow marking your destination, and an “X” where you are standing.
In the not-so-distant future, if not already in some stores, you will send your entire shopping list ahead of time and the AI-driven map will show you the most efficient route and then guide you along.
Your shopping cart may have an interactive screen on it so you don’t have to fumble with your phone. As you pass different departments, you may receive prompts about items you bought before and might have forgotten to add to your list, or items that go along with something else you’re buying.
Grocers will use AI to provide meal recipes, ingredients, a map with aisle locations, tips, and let you scan and check out without ever needing to go near a register.
Retailers are using “AI styling” and AI “assortment planning” to encourage sellable product mixes. You might go to an apparel store and ask the chatbot: “I’m shopping for clothing for my 18-year-old daughter who is about to go off to college in Boston, loves Taylor Swift’s music, is studying Spanish. Attached are recent pictures. Suggest a wardrobe that would fit a budget of $1,500.”
The response will use natural language to describe items, with cultural references and explanations, and some design tips about color and styles. The items suggested will be in stock that day on the racks and shelves, and the map will make finding them a cinch.
That sets a new bar for frictionless.
AI can be a personalized loyalty builder, offering repeat shoppers discounts on the spot or deals on multiples of an item. And so on.
The next several years will be telling. AI will not be a tide that lifts all boats. Some retailers will do it well, and some will not. While some critics have warned against stores becoming websites, the more likely future is more productive, more profitable and possibly fewer stores with fewer but more effective employees.
For example, at a recent National Retail Federation event, incoming Walmart CEO John Furner told attendees that AI automation is reducing the amount of manual labor required of employees. “They were doing really physical jobs, and now they’re bot techs,” he said. “So it’s really helping people work with their head more than their back.”
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