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With the rise of e-commerce titans like Amazon, today’s retail landscape is built on a digital foundation—and words like AI, data, personalization, convenience and unified commerce are the new competitive advantages.

As a consequence of this digital ecosystem, consumers have an entirely new set of behaviors and expectations when it comes to shopping. With on-demand services like Amazon Prime offering next-day delivery and 24/7 gratification, shoppers have a much higher bar than their coupon-collecting and bargain-hunting predecessors. They not only consider convenience and flexibility absolute musts, but also crave personalized service and experiences.

As offline and online retail converge into a single, seamless channel, AI-powered experiences will become essential for retailers to meet their customers’ needs, no matter when, where and how they choose to shop. As a blanket term, AI refers to any number of cognitive softwares that can act, sense and build upon stores of information. Although it has been used to power backend processes, AI is becoming a more sophisticated tool to power differentiated services, curate products and even facilitate a more present, human connection between retailers and their customers.

By aggregating data and streamlining decision making, retailers can ensure their shoppers receive personalized service and relevant, informed assistance. Here are some of the ways that AI can contribute to the customer experience of tomorrow:

AI derives actionable Insights from multiple sources of data.

Artificial intelligence can aggregate data from all of a retailer’s digital platforms—financial, supply chain, CRM, IoT—and perform continuous analysis to deliver insights in near real time. AI also applies context, such as market forces, weather and historical trends, to give these insights even greater relevance to customer service.

AI improves the customer experience.

Sentiment analysis capabilities allow AI to tailor its interactions with customers in real time based on their emotions. On its own, AI provides shoppers with a digital personal assistant to guide their decision-making and shorten the conversion cycle. Retail associates can also use AI to inform their interactions with customers by easily referencing individual shopper profiles containing their corresponding purchase history, interests and preferences. AI understands day-to-day changes in consumer behavior and adapts content, recommendations and services with every interaction.

Real-time, contextual recommendations are simplified with AI.

Referring to previously collected data to strategize on decisions at hand, AI equips employees with role-optimized dashboards that direct them towards relevant tasks. It can increase the accuracy of adaptive pricing models by tracking supply and demand, and develop heatmaps based on in-store customer behavior to understand which store layouts drive conversion. By analyzing behavioral patterns, AI can identify customers who need help before they even seek it themselves.

Retailers can use AI to boost their credibility.

AI assures customers of quality, efficient brand interaction, no matter the channel, and empowers associates with the resources to deliver authentic and personal service. Retailers implementing AI can also encourage partnering suppliers and service providers to leverage its analytical insights and improve their own service.


For more intelligent retail insights and findings, download Microsoft’s AI Retail Playbook or visit microsoft.com/retail.