How AI Blurs the Lines Between Online and Offline Shopping Experiences

Even though AI went from a science fiction ‘hero’ to a part of everyday reality, there is always more to achieve with the application of AI across industries. Some estimates suggest that the total global market for robots and artificial intelligence will reach ~$153 billion by 2020, and the adoption of these technologies could improve productivity by 30% in some industries.

The importance and impact of AI across industries have been recognized by professionals researching, developing its capabilities and implementing it. A particular industry we will be paying attention to is retail – a massive machine driving economies and going through digital-driven disruption. Worldwide, total retail sales were expected to hit $24 trillion in 2015.

Offline retail – brick-and-mortar – has recently been under fire as sophisticated AI-powered e-commerce channels shinked foot traffic in stores. One thing lacking of e-commerce though is a thing that will keep brick-and-mortar alive (until VR is mature enough and widely adopted) – in-person interaction, where AI appears to be having opportunities to make a change.

E-commerce cannot have it all as robotics and NLP blur the lines between online and offline shopping

Forbes outlines the hallmark and the appeal of in-store experience in comparison to any advancement in e-commerce. In-store, you engage with the sales person around a conversation about your specific needs: do you have this in red or what size does this come in, etc. They help you find the right product based on what you told them you needed or were looking for. That same experience doesn’t happen on-line, yet, Forbes explains.

Indeed, in-person communication and touch and feel of the products in stores have not been topped by any achievements of e-commerce yet. And just like AI was able to significantly enhance the online experience with sophisticated recommendations algorithms and chatbots, there is a place for it in the physical world as well. Robotics powered by advanced NLP capabilities could be the next step in retail that will bring online and offline shopping experience much closer. In fact, the natural language processing market’s size is estimated to grow from $7.63 billion in 2016 to $16.07 billion by 2021, at a CAGR of over 16%.

If we can have assistance from a bot online, why can't we have assistance from AI-powered robots circling among isles? Connected to the internal inventory-tracking database, in-store robotic assistants (in any form) could easily apply the same algorithms they would online to suggest products to customers cruising for something interesting. In addition, the ‘knowledge’ on the physical distribution of the merchandise in the store would allow assistants to help to find something the customer may like and possibly want to try on.

A robotic assistant can perform the exact same duties as a human assistant – move merchandise to the appropriate place, ask customers if they found what they were looking for and help them to make a choice. In fact, some estimates even suggest that by 2020, 85% of customer interactions will be managed without a human and at the close of 2018, customer digital assistants will recognize customers by face and voice across channels.

There are other ways AI can impact physical retail: through the optimization of stuffing depending on seasonal and holiday-based sales data in each store, determination of new store locations based on historical data such as sales, demographics, distance from competitors, nearby events and more, sales forecasting and merchandise distribution optimization among the chain stores, marketing and supply chain optimization, etc.

In other words, AI can benefit both online and offline parts of a retail business in different ways, bringing closer both experiences with same technologies. And until there is a way to let customers physically experience the product while shopping online, ‘feel’ its size and fit, brick-and-mortar may always be at a more advantageous position given the same AI-powered capabilities.