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Everyone is talking about, and wondering how Artificial Intelligenc (AI) is going to change Retail and shopping.

While nobody has any final answers yet a lot of prople and companies are building and experimenting with options we can try and see how the can help.


In general there are two main areas AI will impact retail:

1. Back-end opertational systems and processess

2. Front-end or consumer facing applications

Each of these areas can benefit from the proper usage of AI but they are vastly different in the overal retail equation.


Small independent stores can leverage AI through various applications to improve their operations and customer service:

1. POS (Point of Sale) Systems with AI Capabilities: Modern POS systems often come with built-in AI features that can help store owners track sales, manage inventory, and gain insights into customer buying patterns. For example, Square's POS system offers analytics and inventory management features that can be useful for small stores.

2. Chatbots for Customer Service: Small stores can use AI-powered chatbots on their websites or social media pages to answer common customer queries, provide product recommendations, and offer support outside of regular business hours. For instance, a chatbot platform like ManyChat can be integrated into a store's Facebook page to automate customer interactions.

3. AI-Powered Inventory Management Tools: Applications like Sortly or Shopventory use AI to help small businesses track their inventory, set up low stock alerts, and predict future inventory needs based on sales trends.

4. Personalized Marketing Tools: AI-driven marketing platforms like Mailchimp use customer data to segment audiences and send targeted email campaigns, helping small stores to reach the right customers with the right messages.

5. Customer Feedback Analysis Tools: Tools like Yotpo or Qualtrics use AI to analyze customer reviews and feedback, providing insights into customer satisfaction and areas for improvement.

6. Security Cameras with AI: Small stores can install security cameras with AI capabilities, such as facial recognition or unusual activity detection, to enhance store security and prevent theft.

7. Energy Management Systems: AI-based energy management systems like Nest or Honeywell can help small stores optimize their energy usage for heating, cooling, and lighting, leading to cost savings.

Not all of these applications are available or even applicable to local retail stores but it's good for retail store owners and operators to know about the options and pick and chose the ones which could be applied and experimented with.  If there is a tool which can quickly be implemented and start providing data as to it's effectiveness in a short amount of time it could provide new avenues of customer engagement or operational efficiencies saving time, money and increase revenues and profits.


For in-store customer interactions, AI can enhance the shopping experience in several ways:

1. Interactive Kiosks: AI-powered kiosks can provide customers with product information, recommendations, and answers to common questions. For example, a kiosk might use a touch screen interface to help customers find products in the store or suggest complementary items.

2. Smart Mirrors: In clothing stores, smart mirrors equipped with AI can allow customers to try on clothes virtually, suggest different sizes or colors, and even recommend matching accessories. This technology can provide a fun and interactive shopping experience.

3. Personalized Recommendations: AI can analyze a customer's purchase history and browsing behavior to offer personalized product recommendations during their visit. Sales associates equipped with tablets or smartphones can access this information to provide more tailored assistance.

4. Facial Recognition: Some stores use AI-powered facial recognition technology to identify returning customers and offer them personalized greetings or promotions. However, this application raises privacy concerns and should be implemented with careful consideration of ethical and legal implications.

5. Augmented Reality (AR) Displays: AR displays can enhance the shopping experience by providing customers with additional information about products, such as features, usage tips, or reviews, when they point their smartphone camera at the product.

6. Queue Management: AI can help manage queues by predicting busy times and optimizing staffing levels, reducing wait times and improving customer satisfaction.

7. Voice Assistants: In-store voice assistants can help customers locate products, check prices, and get answers to frequently asked questions.



On the consumer facing side AI has the potential, and change they way consumers search, discover and purchase products online.  Google as the leading search engine is aware of this and is already working on options to enhance and uprade it's productds with AI with products such as Gemeni. OpenAI, the creator of ChatGPT is also developing a GPT marketplace which will provide specific individual applications including for shopping and product discovery.

Local retailers do not necessarily need to jump into this part themselves, unless there are easy to use application which do not require technical know how and resources.

The following applications of AI are being expected with a higher probability impacting consumer shopping behavio over the next few years.

Important note:  AI has been used in retail applications for decades and the main differentiation and the recent news more specifically point to Generative AI, or naturan human communication format of communicating with computers.

1. AI-Powered Chatbots: chatbots have been around for a while and with new Generative AI models they can engage in a lot more human type conversations as well as treat data in a way (using LLM - Large Language Model technology) to come up with more comprehensive and useful answers for customers.

2. Personalization Engines: personalization is a key part of online shopping and AI has been used for decades in this field.  The majority of AI used for personalization is the mre traditional pattern recognition and deel learning models however Generative AI technology is already being experimented to enhance personalization.

3. Visual Search: Visual search can help consumers find "like" items from uploading or showing a similar item to search tools.  Google has had an image search tool available for years and with Generative AI companies can also start potentially offer designs to consumers or mood boards made from across the Web.  

4. Voice Assistants: Voice technology has been in use with amazon alexa and Apple Siri and Google Assistant for years although the actual usage remains limites.

It can be daunting for retail storee owners, and rather unproductive, to try to keep up with all differnt way AI will change retail and shopping.  The best course of action is to remain open and see what vendors offer in ways which require minimum or no technical work (yes this is possibnle), and quick ways to experiment without large investments of time and money.


Contact us if you are interested to partner or contribute to this topic.