Now far from just science fiction, artificial intelligence could be the key to future retail success, as Qubit’s research reveals.
While artificial intelligence (AI) is rarely out of the news today, research by Retail Week and Qubit indicates many retailers are still not taking full advantage of it.
The opportunities are clear: more than four-fifths (82%) of retailers surveyed believe machine learning, the form of AI with which most are familiar, will have an impact on the sector. Yet less than half currently use this technology in their own businesses.
Planned investment in new technologies remains modest. Four in five retailers plan to invest less than £1m to introduce new tech, and almost a quarter (22%) intend to invest less than £50,000.
This represents a frightening lack of commitment from retailers to tech development, and the delay in adapting to artificial intelligence should be particularly worrying.
Here are three reasons why, when it comes to AI, retailers need to put their money where their mouth is:
1. Ease is no longer enough
Satisfying customers is no longer straightforward and today’s retailers must pre-empt their needs.
“Satisfying customers is no longer straightforward and today’s retailers must pre-empt their needs”
Graham Cooke, Qubit
The businesses that thrive in future will be those that know their customers best and can combine persuasive personalisation with a near frictionless shopping experience.
AI has the potential to learn from customer behaviour to anticipate their most likely needs and preferences – whether this means flagging specific products, changing the type of service or converting browsers into buyers.
2. Data is king but scale rules all
Truly persuasive personalisation for every customer can only be achieved by processing retail data at a monumental scale.This is far beyond the capabilities of human analysts and is only achievable by AI.
“By the time human analysts get round to interpreting your data, it will likely be out of date”
Graham Cooke, Qubit
To put this in perspective, Qubit’s platform processes more than 10 billion data points every day to create more than 1 billion daily experiences – it would take a human analyst more than 800 hours to match this.
Ignoring AI simply means the vast majority of your data is worthless. By the time human analysts get round to interpreting it, it is likely to be out of date.
3. The market is adapting
If you’re still not sold on AI, rest assured that within three years most of your competitors will be.
Market research firm IDC predicts that marketing spend on AI is set to rise to more than $2bn (£1.5bn) by 2020.
Since AI’s results improve as the machine learns from increasing amounts of data, early adopters will reap the biggest rewards.