How Incorporating AI into Retail Operations is Saving Billions
The use of AI in the global retail market is expanding rapidly. Last year, spending on AI was valued at $1.80 billion, and this is expected to increase almost ten-fold in the next five years to reach a staggering $10.98 billion. Retailers are rapidly implementing AI solutions to automate processes and improve the customer experience. The reason behind this rapid growth is that retailers are discovering that AI can bring significant cost savings, and incorporating it across the entire value chain can save as much as $340 Billion. As this impact is so huge, it is worth looking at some of the AI implementation trends that are transforming the industry.
In 2018, Amazon made a huge splash by opening its Amazon Go store which uses facial recognition technology to replace human cashiers. In addition, weight sensors are used to determine when the customer removes an item from the shelves and it is then automatically added to the person’s virtual shopping cart. It was not long before other companies followed suit and also began to eliminate human interaction from their shopping process. Stores like Zara and Mango are now allowing customers to pay entirely via their mobile app. All the customer has to do is pick out the clothes when they come into the store and pay for them through the app. There is no need for them to stop at a check out kiosk.
This is a very popular trend and one that will undoubtedly continue to grow in the future. In December of last year, 47% of adults in the US regularly used the self-checkout feature. Since this is arguably a win-win for both stores and consumers, automation in stores will become more widespread as time goes on.
Using Robotics to Alleviate Labor Woes
Every year, it is becoming more and more challenging for stores to find workers who can perform their duties in accordance with corporate standards, but for less than average pay. These challenges will be even greater this year in the wake of the Coronavirus pandemic despite a number of companies increasing hourly wages and adding new benefits. Robots are stepping into this gap.
Walmart, in particular, is ramping up the use of robots by bringing them to an additional 650 stores this year. Robots are already being used for a wide variety of purposes such as stocking shelves, sorting items from trucks, and even cleaning the floors. Now, Walmart is also planning to use them to deliver groceries to its customers. The new Alphabot can pick, sort, and pack groceries ten times faster than a human. This could resolve the labor shortage from both a recruitment and financial perspective, though such a rapid pace of automation could have an adverse effect on the job market as well. As many as 36 million jobs in the US are currently at risk of being automated.
Automation Behind the Scenes
Automation is not only changing customer-facing jobs, but is having an impact on back-office positions too. This includes innovations such as inventory management systems that purchase new stock automatically, adjust for product demand, alert employees about low stock items, and many other useful tasks. The same holds true for accounting where activities such as billing, payment processing, accounts payable/receivable, and a lot of other jobs are becoming automated as well. Computers are simply more efficient, accurate, and, ultimately, cheaper than human workers which is why we are seeing such a dramatic shift towards automation.
AI in Retail is Supporting Business Growth
Thanks to all of the new developments in technology, growing your business no longer requires making huge investments in human capital. Automation is allowing stores with small teams of employees to be just as productive as those with much larger workforces, if not more so. More than that, it is enabling them to make smarter and more confident decisions. Their customers can enjoy a more convenient and personalized experience, which is very important in today’s marketplace.
Mindy Support is committed to helping companies develop new AI-powered technologies that help reduce costs and improve customer experience. The solutions mentioned here are powered by technologies such as facial recognition and computer vision which require a significant amount of data annotation to work properly. Our teams are highly trusted by a number of top GAFAM and F500 companies. They are available to provide you with the same high quality data annotation service, and can be scaled up or down as needed. We offer the best quality-price combination in the market. Contact us today to start your free data annotation trial.
July 16th, 2020Mindy News Blog