Several weeks ago, we shared a detailed report from the McKinsey Global Institute that analyzes hundreds of use cases for artificial intelligence (AI), and provides a perspective on how firms across a variety of industries can most benefit from this exciting technology. One area featured in the report is AI in the retail industry.
According to the research highlights, use cases where both eCommerce sites and brick-and-mortar retailers can benefit from AI. eCommerce sites collect massive amounts of user information which can be used to provide product recommendations, customize promotions, and provide a highly personalized shopping experience. For brick-and-mortar establishments, AI can greatly optimize supply chains and inventory management functions.
The chart below from the McKinsey report illustrates the potential impact of AI in the retail industry, illustrating that marketing and sales can gain the most value from AI, specifically when it comes to pricing, promotion and customer service management. According to the authors, “our use cases show that using customer data to personalize promotions, for example, including tailoring individual offers every day, can lead to a 1 to 2 percent increase in incremental sales for brick-and-mortar retailers alone.”
This data provides Retail executives with targeted guidance on where they should be investing in AI-based solutions to get the highest return on investment.
Retailers that have made investments in AI are starting to realize significant benefits, particularly when it comes to machine learning-based solutions. From chatbots to recommendation engines, to manufacturing and inventory management, leading retailers are using the technology to gain a competitive advantage.
At Appen, we’ve helped retailers improve their machine learning through high-quality, human-annotated data. With a range of services including search query relevance, defect testing and content moderation, we can help you make the most of your investments in machine learning. Learn more here.