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The Implications of Artificial Intelligence on Retail

While it is clear that we have entered the era of artificial intelligence, most industries have not even begun to understand the profound impact this technology can (and is) having on their businesses. One of the industries that is leading the way in terms of applying AI to their industry is retail. Here are a few ways that AI is already impacting the retail industry the whole way from product manufacturing to influencing the purchasing habits or customer service experiences of everyday consumers:

Retail Manufacturing

In a few cases, manufacturers are utilizing machine learning technology to detect defects in millions of units being produced. By using algorithms to examine millions of data points about the size, shape, and consistency of products, machine learning can detect a trend and notify employees when there is, for example, a 0.01cm defect on a given product. The ability to proactively identify defects saves valuable time and money to correct the problem and ensures a brand consistently meets customer expectations. For example, G.E. has created their Brilliant Manufacturing software so brands can predict, adapt and react more quickly than ever before.

Product Recommendations

Since as early as 2003, Amazon has been pioneering collaborative filtering techniques to make product recommendations to customers. According to McKinsey, 35 percent of what consumers purchase on Amazon and 75 percent of what they watch on Netflix come from product recommendations based on algorithms that correlate past customer purchases, searched product, and what others have purchased to determine what should be shown to any given consumer. They also determine what emails should go out at what time based on customer behavior so products within the email are likely to be relevant to your interests at any given point in time.

By constantly updating itself, the AI algorithm begins to learn more and more about what to recommend to the customer.

Voice Controlled Assistants

Voice controlled assistants such as Amazon Alexa and Google Home use machine learning and natural language processing to understand speech and take action based on it. With these tools, consumers can inquire about a product or service and even go so far as to tell the voice-controlled assistant to purchase an item on their behalf automatically charging their credit card for the transaction and ensuring it gets delivered to the appropriate address/location. It is only a matter of time (likely measured in days or weeks) until these voice controlled assistants go beyond just order execution to start making product recommendations.

In-Store Customer Service/Experience

By now, we are all quite familiar with the use of AI-driven chatbots online and computer-driven interactive voice response (IVR) experiences in call centers to try and address basic customer concerns. Increasingly, retailers are bringing such approaches to the in-store experience by using robots and in-store chat to increase engagement and help consumers find exactly what they need within the store.

Today, these experiences are largely centered on using robots to accept and understand consumer voice commands to help navigate a consumer to the right area of the store for the products of interest; however, retailers are starting to test having robots go pick and pack a customer order on behalf of the customer in situations where the customer knows exactly what he/she wants to purchase.

While many industries are just figuring out how to leverage Artificial Intelligence, the retail industry is already relying heavily on the power of algorithms to improve operational efficiency and drive better customer experiences. And it’s not stopping there. The retail industry will continue to push the envelope as evidenced by Walmarts recent move to patent a self-driving shopping cart. So, next time you are checking out at the grocery store, take a moment to thank the person packing your groceries…then, reach out and press on his/her cheeks to make sure it really is a person and not a robot.


Matt Fleckenstein

Matt is the Chief Marketing Officer at Nintex. He previously held the title at Amplero, an Artificial Intelligence Marketing (AIM) company. Matt has marketed cloud technology offerings at Salesforce, where he served as VP of Product for both the IoT Cloud and Marketing Cloud. He is passionate about positioning Nintex as the leader in Intelligent Process Automation.

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