Think AI in retail is all chatbots and product recommendations? Think again. Here are three ways retailers are using AI to reshape the industry behind the scenes.
The retail sector is no stranger to artificial intelligence (AI). As customer expectations continue to shift rapidly towards connected, personalized experiences, AI is helping some of the world’s biggest brands “wow” shoppers and create loyal brand ambassadors.
From AI chatbots helping to resolve customer issues, to AI-powered analytics helping retailers deliver more personalized omnichannel experiences – AI is enabling a smarter, more hybrid approach to retail.
It’s also helping retailers improve critical processes behind the scenes. And in this blog, we’ll explore three ways AI is redefining retail operations today.

1. Improving security and safety
In 2018, retail shrinkage in the US totaled $50.6 billion. So, to help keep shoppers safe and stores secure, many retailers are augmenting traditional CCTV with intelligent video analytics using deep learning technology.
This way, real-time video can be analyzed to secure where shrinkage is most likely to occur—like cash registers and self-service kiosks—and give both employees and shoppers peace of mind.
One retailer is even using deep learning technology to examine its old CCTV footage to identify recurring events and better understand where risks lie. It’s a move that has since helped it scale accurate real-time video analytics across multiple stores to improve security and safety.
Numerous other retailers are using AI, the Internet of Things (IoT), and computer vision to prevent shrinkage from occurring between the factory and store shelves by digitally tying package and delivery truck data together.
2. Understanding shifts in customer preferences
Without a smart, contextual view of your customer data, it can be difficult to anticipate sudden changes in customer behavior, such as product interest and service usage.
While seasonal trends are simple enough to prepare for, online influencers, changing attitudes towards sustainability, and disruption from innovative start-ups can see even reliable sellers fall out of favor overnight.
That’s why the smartest retailers are using AI and advanced algorithms to contextualize and improve customer engagement across all touchpoints. They can also connect third-party data related to global consumption in their industry to get a more diverse view of what’s likely to impact buyer demands.
In practice, this enables retailers to personalize marketing campaigns, product placement, and service delivery based on how customers behave in-store, online, and even on social media. In fact, expect to be using AI-powered automation to gather customer intelligence by 2021.
3. Optimizing inventory management
After gathering data from across the supply chain – including from IoT-connected devices and functions like materials, distribution, and transportation planning – retailers are using AI and machine learning models to better understand it.
This means they can gain greater supply chain visibility and more accurate insights into stock processing, dispatch schedules, warehouse activities, and even how their distribution partners are treating their goods – all essential insights for forecasting stock and optimizing planning.
Retailers are also using AI to power logistics management systems that can apply intelligent automation to adjust inventory, staffing, and distribution schedules in real time to ensure everyone and everything is in the right place at the right time.