Shop Direct boss Alex Baldock has said that AI will transform retail, whether retailers choose to let it or try to ignore it.

At Retail Week Live today he said: “AI [artificial intelligence] will transform retail quite fundamentally.

“It can do so without your deliberate choice or it can just happen to you. But is barrelling down the track towards you.”

Baldock described the extent to which AI influences Shop Direct’s personalisation efforts – a key strand of its overall strategy.

He told delegates that AI was able to tell when best and how often and by what method to contact its shoppers. Shop Direct now uses AI to spot the early warning signs that a customer is about to stop spending with the retailer, adding that AI is also able to tell it how to fix that.

“The name of the game is inching your way to improvement”

Alex Baldock

“This is going to be huge,” he added. “This will in time transform how online retailers interact with their customers.”

Baldock said that Shop Direct knew its customers’ likes, dislikes, location, influencers and even “on a good day” state of mind – but that even with that level of knowledge, converting behaviours into a sale was difficult.

The average retailer’s online conversion rate is 2.8% while Shop Direct’s is above 4%.

“We find it hard and we don’t focus on anything else,” he said. “It’s not that we think we are smarter than anyone else. We are all over it all the time. The name of the game is inching your way to improvement.”

Baldock also told delegates that Shop Direct intended to win the VR [virtual reality] battle.

“No one has yet commercialised VR successfully but I would bet my house [on] someone in retail doing it within the next five years. And we intend to be among that number.”