How AI Can Be Used in Successful Retail Strategies

AI in retail

By Michael Needham, Chief Content Officer,

AI is revolutionizing the way business works and it can be used in a variety of different retail applications, making life easier and making retail strategies much more effective.

The use of AI in retail has become much more frequent as it has become accessible and this trend is likely to continue to grow.

Uses of Artificial Intelligence in Retail

Let’s dive into some of the uses of artificial intelligence in retail.

Customer Insights

AI can help retail spaces, both in person and online, to create more personalized experiences. In-store displays and the service you get when you visit a store can even be used to provide a customer profile.

The way you use a shopping app, behave in store and take advantage of promotions can be fed into algorithms and AI can process the data to understand your behavior. All of the data that stores can collect can help to predict things like what kind of behavior a customer might be prone to in the future and what they would like to buy.

This is not just a way to get people to spend more. It can improve the customer service experience, too. People would usually rather see ads and related products that they are interested in than random ones and AI can help with creating relevant and tailored experiences.

Managing Stock and Inventory

AI can be used to help businesses to increase productivity in a number of ways, including managing the stock and inventory of the business, reducing waste or stock that has to be sold cheaply as a result.

Intelligent AI in retail can be used to forecast things like changes in demand seasonally or based on competition. AI thrives off being fed data and in a big company there is often a lot of information that can be used to gain a better understanding of delivery and stock levels.

This can also impact the business you are running and allow you to make changes. For example, some people using AI in retail are able to understand how demands shift and alter and how this may impact pricing.

There is a knock-on effect to managing stock and inventory and businesses can change their strategies when it comes to employing people and even managing shifts and breaks, based on when they are most likely to need staffing in their warehouse, for instance.

Outreach and Engagement

Virtually every company has to make some effort to reach out to customers and build and garner a relationship. In the world of retail, a lot of customers expect brands to have repeated interaction with them, especially if they are brand loyal.

Consumer behaviors and engagements can be measured through some CRMs and this means that businesses can see what works in terms of shoppers and their conversion. For instance, some customers might react well to personalized marketing content sent via email. AI systems may be able to measure this and provide better recommendations for customers, which may even lead to more sales.

In-Person Stores Can Be Free of Cashiers

We are already seeing this new tech used. Things like Amazon Go means that you can use your shopping account and there are far fewer employees needed on site. This is great for stores to streamline their operation and save money on staffing but they can also make a more efficient shopping experience.

Because there is data stored on every single purchase, this means that the companies using this AI and smart technology are continuing to gain more data and this can drive even more personalized data.

Visual Search

AI in retail has become an incredible system for categorizing and sorting images and this is a way to provide people with a way to search based on images.

It can also be a way to tag and connect products and show alternatives. For instance, AI might learn that people who search for a “yellow dress” end up preferring a different style of dress and this might show them the alternative.

This is the sort of thing we can see when we visit huge online stores like Amazon. A lot of stores will have a “customers who bought this regularly buy” section. Using this data from customer searches combined with an AI analysis of what is in the images, means that people can be matched with products they are more likely to buy and more likely to enjoy.


AI support such as chatbots can be a fantastic way to help customers without having to pay a fortune for employees to constantly be responsive to people with a problem. This is one of the biggest and best benefits of AI and this means that the system can ‘learn’ from the issues.

AI chatbots can provide better responses than just a simple “knowledge base” or an FAQ section of a website and much more of a personal experience. With AI in retail, they are becoming much more consistent and reliable.

Like everything with AI and IoT, it is likely to perform better with more data fed into the system and this can allow the chatbot to provide every single customer with a personal experience. While customers still value the option to speak to a human, if they can get a quick response from an AI then this is more than sufficient, especially if it resolves the issue.


AI is a relatively new addition to the world of retail. Whether you are shopping in-person or online, AI technology is inevitably going to change the industry. If you work in the world of retail, it could be time to embrace AI to stay ahead of the curve and improve the experience of staff and customers alike.

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