How business owners use big data and AI in retail to drive sales

Posted on October 16, 2019 by Michael Benarroch

How business owners use big data and AI in retail to drive sales

Posted on October 16, 2019 by Michael Benarroch

While we can all agree that AI is the new frontier of digital exploration you may be surprised to discover that the retail industry is among the economic sectors most heavily investing in leveraging AI to drive sales.

AI in retail along with consumer data analysis is being used by national and local retailers to stay on the leading edge in the integration of technologies that promise to further disrupt our industry in this next phase of the digital revolution.

It seems the writing is on the wall, the new phase will be one of AI and big data breaking open possibilities in marketing, shopping options, customer experience, supply chain efficiency, revenue channels, delivery, service, brand building, and any other facet of retail that ultimately impacts customers.

This is opening the door for a new multi-channel retail economy, one where our online and offline retail shopping experiences blend seamlessly to provide custom tailored solutions, for each and every customer, on demand.

The New Multi-Channel Retail Economy

Increasingly, online and in-store retail models are evolving to not only co-exist smoothly, but to integrate and complement one another to deliver a seamless cross-channel experience for customers.  And as we’ve come to learn, Millennials and Gen X consumers have proven their love of online shopping convenience, while Baby Boomers have stayed true to their roots in patronizing Main Street. 

But Surprisingly, 60% of Gen Z consumers are expressing a preference for the physical in-store experience. So, the story of retail appears to be one of generational tastes, perhaps more so than a technology-driven one, after all.

Going into 2020, the point seems to be here that both physical and digital shopping options have, by now, proven to be essential modern retail industry components, both here to stay for the foreseeable future. The retail consumer of 2019 cannot be defined as a single-channel shopper. And AI solutions are already helping retailers better understand and predict customer behaviors in both physical and virtual store spaces, while also enabling retailers to make more informed decisions on their approaches to improving customer experience.

What do retailers want from AI?

The answer is simple: leverage data and consumer insight to custom tailor the experience at scale.  And while we may be in the early days of AI, retailers have already successfully applied AI to a range of functions within their operations to support sales and service personalization.  The investments are being made and retailers are going all in on these advancements. Between this year and the next three years, retailers will have invested an estimated $7 billion into their technology (Juniper Research) .

As retailers, our hope is that AI will continue to:

  1. Optimize personalization for consumers, to deliver the increasingly tailored retail customer experiences that modern shoppers are growing to expect, as data analytics continue to yield deeper customer insights for retailers.
  2. Create a ubiquitous shopping experience between online and offline shopping.
  3. Enable real-time dynamic pricing to ensure that every item is priced at the right price, for the right consumer based on past shopping habits, growing margins.
  4. Replace staff members who’s roles may be automated – reducing costs and eliminating human error.

But let’s not get away from the fact that shopping in physical stores isn’t going anywhere for the foreseeable future. A McKinsey report projects that in 2020, 80% of retail sales worldwide are expected to be made in physical stores.  Nevertheless, retailers in physical stores are right to put resources into better connecting with their new and existing customers. They’re capturing consumer behavioral data and shoppers’ feedback on their in-store operations and applying analytics super-charged with AI.

Algorithms learn, adjust, and steer retailers’ actions to craft more and more finely targeted marketing campaigns, helping them respond with greater timeliness to emerging trends, and even guide them to finer-tuning of processes to more tightly manage everything from checkout queue times, to supply chain reactions.

The future of AI in retail.

Automation and Robotics

Cutting-edge AI, sensor technologies, and computer vision (also called 2D or 3D CV) together back robots and systems that can operate physical retail stores without human staff, slashing retail costs and actually enhancing the customer experience. How could that be? Of course, many retailers consider their staff as front-line customer experience, but thinking has shifted towards an environment where the people you bring into the store with you, the other customers you meet, and the curated products is what provides social experiences for customers. Packaging, receiving, warehouse storage, and order picking are also facilitated by these technologies.

VR and AR

Artificial intelligence (AI) and machine learning (ML) enable deployment of AR and VR (short for Augmented Reality – where real spaces are augmented with digital components or Virtual Reality – where you’re experience a virtual world) for an array of retail applications, such as VR immersion for shopping in virtual reality stores, and AR for trying on clothing, eye-wear, shoes, etc.


Natural language processing (or NLP), machine translation, semantic computing, and other advanced AI-facilitated technologies make interactions exclusively between humans and computers more natural and productive, and more conducive to an optimal customer experience.


With machine learning, sensors are the supreme information collectors capacitating big data analytics, used in retail to increase sales and satisfaction rates among retail customers.

Personalization taken to the next level.

As retailers, we’ve always focused on two things: sales and customer experience. Today’s retailers hold unprecedented power through AI and data technologies for bolstering the caliber of customer experience they deliver to drive both online and in-store sales. 

RILA’s own research, as well as that of Accenture and other research firms, have reportedly highlighted the imperative of personalization to the extent of embracing the need to serve shoppers on their terms. For example, a major online men’s clothing retailer reportedly found that shoppers were 44 percent more likely to buy after the company rolled out AI-facilitated technology for personalizing the customer experience.

Taking personalization beyond the shopping experience, entirely new retail business structures are emerging, such as the C2M business model in which manufacturers utilize AI and big data to optimize their products to suit customer preferences.

Applications of AI in Retail

Retail industry giants are currently positioning to leap into the lead on AI facilitation in customer interaction and intelligence. Consider a few stunning use cases:


Always on the forefront, Amazon is reportedly employing cloud computing, computer vision, machine learning, and sensor fusion software. Last year, the company opened “Amazon Go,” an unmanned store. The retail order processing Goliath is also implementing futuristic multi-dimensional sensing systems that gather and process shoppers’ conversations and facial expressions and digitally analyze the information in real-time, to derive an interpretation of it as customer feedback. This is all in the interest of optimizing business performance of its online and physical store locations.


Always on the cutting edge in growth strategy, the company has reportedly collaborated with IBM, Microsoft, and other tech leaders on solutions for tracing new customers and vendors to obtain real-time information about products along its supply chain. The mega-chain is employing big data, blockchain and machine learning technologies to structure and implement the new, unparalleled retail tracking system.


The company has reportedly patented technologies utilizing machine learning, biometric facial recognition, and even recognition of eye vein patterns, all for purposes of developing a more robust generation of the massive company’s Alipay mobile payment system. The idea is to permit customers to pay for purchases with scans and smartphones, no cash or card required.

AI limits in retail.

There are remarkable developments underway in AI fitted to a wide range of retail purposes. For example, reportedly a Chinese company has built robot technology, to begin delivering to urban areas in China. The invention features 360-degree visual capabilities and LiDAR-based navigation. The robots can even successfully use facial recognition technology to validate a package recipient’s identity.

Notwithstanding these and other advancements that were incomprehensible a decade ago, there remain some key potential limitations on AI integration into retail. Most fundamentally, there are still a lot of unanswered questions about how AI can actually generate ROI, i.e. how much investment will be necessary to make enough change in customer experience so that consumers will be willing to adopt use. There’s also the question of adaptability of the retail supply chain and customer-facing processes.

Is AI possible for all retailers?

Clearly with AI, retailers can extract information from big data with levels of analytic sophistication and computational power that are not possible with conventional computer processing or the most intellectually herculean efforts. AI technology is anticipated to massively impact retail customer interactions both online and in-store.

AR and VR, facilitated by AI, machine learning, and natural language processing technologies will, together with the big data enterprise, define the future of retail across virtually all online and offline sales channels. AI and big data will personalize offerings and accommodations, and AR and VR will take customer experience to new information-rich levels of convenience, and expediency.

So, what we can look forward to in new retail industry technologies over the coming years is a period of great enablement by AI and AI-facilitated technologies, such as big data and others mentioned here. 

AI advancements already allow retailers to access datasets that help retailers understand patterns and discover the most effective ways to think about and manage sales traffic, employee workloads, stock levels, and so many other facets of retail management involved in delivering exceptional customer experience, and ultimately higher conversion rates and revenues.

Soon, AI and big data are anticipated to elevate Main Street retailers’ competitiveness in personalization and overall customer experience to the level of their big-data-driven, digital-native, online counterparts.  Main Street has become well aware of their need to compete in this sphere of consumer intelligence. So, there’s little wonder why there has been such a high degree of investment in AI across the brick & mortar retail sub sector as well as in the online area of the new retail economy.

Going forward, as physical store retail businesses realize positive ROI from AI and big data investments, a competitive balance can be achieved that we have not yet seen between the physical and digital subsectors of the industry since the advent of online retail.

Want to talk out how tech can drive customer experience for your business (or any other topic you may want to discuss)? Contact us anytime at CBSF Store Fixtures Canada at (800) 535-2279, to schedule an appointment to discuss your needs.