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Using Ai To Fight Amazon!

· Retail,Retail Apocalypse,Retail Industry,Amazon

Using Ai To Fight Amazon!

The Retail Industry is having a tough decade, with the decline in offline foot traffic and drastic change in the technological landscape. Amazon has become the Retail Industry’s biggest competitor now and in the future. Amazon has become so big that people have given a name to its impacts on the world, “the Amazon Effect.” However, some still have great hope in the retail industry. Salesforce senior VP, Shelly Bransten said in an interview with CMO that she is “shoptimistic” on the future of the retail industry on the shine of AI.

There are two major ways that artificial intelligence could potentially boost retail in the future, sales and operations.

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In an interview with “Exchanges At Goldman Sachs”, Drew Borst of Goldman Sachs Research found out that the major motive of cinema attendees changed drastically from the viewing to the experience, and theaters are actively adapting to this trend by making the seats more comfortable and implementing extra services.


This trend is similar in the retail industry, while the shops are not as adaptive, since Shelly observed that most businesses are only utilizing 1% of the data collected from the customers by offering traditional standardized services to all customers. “Moving from transactions to relationships”, she pointed out, “is what brands who are winning today are doing.”

This is a gap that AI’s can fix by offering unparalleled data gathering and customized services. For example, Japanese SoftBank telecom operations introduced “Pepper”, a humanoid robot that can interact with customers by perceiving their emotions. This boost in customer experience increased the foot traffic of an experiment SoftBank Mobile store in Palo Alto by 70% and Neo-pen sales in Santa Monica by 50%.

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Additionally, according to TechEmergence. AIs helped a hip apparel store “Ave”, where “retailer experienced a 98% increase in customer interactions, a 20% increase in foot traffic and a 300% increase in revenue.” Instead of handing out coupons or starting mass marketing campaigns, the adaptation of AI marks the transition of the retail industry from selling products to selling experiences, building a special niche for traditional retailers in the new era of Amazon.

On the other hand, AI’s greatly boost the operations of business. According to a report by PwC, as more and more retailers are moving online, the problems of logistics and operations are becoming increasingly critical to businesses. Machine Learning models study customer behaviors from data collected online and predict the pattern in the future for the optimization of stock management, customized marketing, and even strategic positioning. This model is obviously incredibly beneficial for businesses, but also labor-heavy as well.

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However, a new technology called Embedded Machine Learning strives to solve this. A venture by Kroger, 84.51˚ builds a platform to use machine learning to build specific models for its clients with little human intervention. The outputs from these models can contribute to optimized decisions that support the front end of the business such as resource allocations and marketing strategies.

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Even though the rise of Amazon seems inevitable, it is not the time to panic yet. If the retailers can adapt to the current technology trend to achieve customized experiences and optimized operations, they can definitely find their niche in the future.

Written by Tianyi Li & Edited by Alexander Fleiss

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