How AI is Transforming the Retail Sector

AI retail sector

Despite common misconceptions, Artificial Intelligence (AI) isn’t something exclusive to big businesses or major corporations with massive budgets. As we see the democratization of all technology, small businesses, too, stand a chance to reap the benefits of this quickly advancing technology. Below, we’ll explore what AI offers the retail sector, with various options for implementing this technology with your retail business.

First Things First: What Is Artificial Intelligence?

Artificial Intelligence helps machines emulate and understand human thinking, performance, and behaviour. It also allows them to function and perform tasks with little-to-no human supervision. Different types of AI have specific purposes, including visual, speech, and decision-making. As AI improves, machines can function more efficiently, solve problems, and even learn how to think. It can also collect data and turn findings into valuable and digestible information with help from various algorithms.

AI helps human beings in many ways every day. For example, AI can invest money on your behalf, hail a taxi, or recommend products based on your interests, among many other uses. Chances are, AI has helped you in some way today.

How Can AI Help Small Retail Businesses?

When it comes to small retail businesses, AI can help with both in-store and behind-the-scenes operations. In-store solutions include customer service, payment collection, inventory management, and surveying. In contrast, behind-the-scenes help involves access to financing, market intelligence, data analysis, and merchandise forecasting. 

Many major retailers have implemented AI into their in-store and backend operations for quite some time. For instance, Wal-Mart uses AI technology to help customers find products and offers substitutions if they’re unavailable. That way, their customer still makes a purchase, and Wal-Mart knows what products need replacing.

Amazon Go
Source : Amazon Go

Another example is Amazon Go, Amazon’s foray into the grocery store space. The cashier-free store allows customers to walk in, take any item they please, and walk out without lining up or cashing out. Overhead cameras and sensors detect customer movement and charge their accounts accordingly. They also collect data to understand how humans interact with the supermarket. 

Other major retailers, like Lowe’s and Sephora, also have used various AI methods to improve their in-store experience and backend operations.

Lowebot - robot commerce de détail
Source : Lowe’s

In 2016, Lowe’s, the American hardware store chain that acquired RONA, introduced LoweBot, a robot sales representative. It worked at select stores across the United States. Customers visiting Lowe’s could approach LoweBot and ask questions in several languages. LoweBot would then guide customers through the store to their desired products.

Sephora color IQ
Source : Sephora

Major cosmetics chain Sephora uses AI software in their Color IQ service, which scans a customer’s face and suggests products based on their complexion.

While exciting for consumers, this new and evolving technology can make it harder for small retail establishments to keep up with big box stores. That doesn’t mean small retailers can’t use AI, though. In fact, many small businesses are already using AI in some way.

Retail Solutions Provided by AI

There are a vast amount of AI solutions for businesses in the retail sector. In most cases, the AI solutions available to retail owners help business owners save time and money while improving the in-store experience. Here are some simple areas where retail business owners can use AI to enhance their business strategy.

Customer Relationship Management

chatbot Ai RETAIL

Customer satisfaction is paramount to the retail experience, and several customer service management solutions for small businesses use AI. Chatbots are perhaps the most common automated customer service tools using AI, which allows customers to ask questions in a chat on your business’ website. This automatic chat prompt can often answer simple questions about order inquiries, operating hours, and more. Alternatively, customers can use chatbots to submit tickets or call-back requests. Using a chatbot frees up time for employees to focus on more urgent issues while offering your customers 24/7 service.

AI can also help retail customers with the help of Agent Assist, which shows a customer’s information on the screen when they contact a customer service representative.

These customer service tools are only some of the ones available to retail business owners. They can help save time and help close customer interactions with speed, efficiency, and customer satisfaction.

AI Forecasting of Inventory and Management

intelligence artificielle commerce de détail

AI can forecast inventory more efficiently while providing better accuracy when it comes to merchandising, and, in the true spirit of AI, there are several ways to accomplish this. Accurate inventory forecasting depends mainly on customer purchasing trends, measured by performance analytics and the heat mapping of a store. Heat mapping tracks movement in the store using a branch of AI known as computer vision with cameras. Retail operators can measure what products customers pick up, purchase, or put down. Companies like Intel are creating AI tools in retail, making it more of an accessible reality for small businesses. Using this software can grant a better glimpse into your sales performance and allow you to understand it in detail.

Heat mapping and computer vision can help you manage inventory in real time, eliminate customer wait times, and avoiding distribution chains. The data can also help create promotions based on the analytical data’s demand.

Market Insights and Data Analysis

Propriétaire de commerce de détail

Market insights and data analysis can help business owners understand their industry and target customers with greater accuracy. Access to highly detailed information was typically reserved for large enterprises with seemingly endless budgets. Fortunately, with the power of AI, small businesses in the retail sector can reap the benefits of these reports, as data analysis and collection of market insights are a lot easier to accomplish. AI can measure analytics, often with real-time information used to generate detailed reports. Companies like Cubeler aim to provide a business hub for SMEs that collects anonymized data to create reports with sector-specific information.


Businesses that want to access financial products faster can do so with AI. The nature of AI yields many possibilities in the world of finance. Now, business owners in the retail sector can connect their accounting software to get personalized loans and financial products using the power of Artificial Intelligence.

Instead of waiting days for loan approval, businesses can now apply for business financing and receive support in a matter of minutes without meeting a representative at a financial institution. It also means viewing several loans and rates based on your qualifying criteria, which helps narrow down the selection process. By showing you multiple offers based on your qualifications, you’ll also be able to compare rates with ease. Financial technology in AI also increases the likelihood of receiving funding and eliminates the need to meet with loan managers or risk negative impacts on your credit score.

Final Thoughts: AI and the Future of Retail SMEs

AI has been around for decades, but humans are witnessing the fastest evolution of this technology in history. That said, SMEs in the retail sector need to be prepared to compete with major national retailers, who are adopting this technology at a steady pace.

The increasing presence of AI in our daily lives can be overwhelming, even frightening. However, using these tools can create an experience that is thoroughly enjoyable for every customer while improving your business. AI shouldn’t be feared but embraced, as it can help SMEs in the retail sector evolve and adapt to this ever-changing landscape.

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