Artificial Intelligence Increases Retail Profits
12/15/2023 - Artificial Intelligence
Artificial intelligence has proven to be significant for retail, given the countless benefits it brings to pricing, stock, and demand management. Its ability to analyze consumers’ behaviour to predict users’ needs is also valuable. These advantages translate into greater profitability and competitiveness for businesses; many are already harnessing artificial intelligence to boost their growth.
According to IBM data, in 2022, 35% of companies worldwide already used AI tools, and an additional 42% had considered implementing these tools in their daily business1. Retail wasn’t going to be any different. Below, we analyze various ways brands and retailers can use artificial intelligence to increase turnover and profits.
Price changes: Dynamic Pricing based on Artificial Intelligence Algorithms
Artificial intelligence pricing tools aid better price monitoring and optimization since they learn the most appropriate prices at any time by analyzing key information, such as competitors’ prices and demand levels. Using features such as automatic repricing, you can change your eCommerce prices quickly to avoid missing any opportunities. For example, by applying a price increase when demand is higher to optimize profits.
Thanks to the advanced algorithms of the latest tools, such as Reactev, it is possible to define pricing rules based on combinations of essential KPIs: Margins, conversions, positioning, competitors, stock and many more. When combined, these rules will allow you to develop any pricing strategy.
Better understanding of consumers and their needs
Artificial intelligence can also help you display personalized prices to different buyer personas visiting your eCommerce, speeding up their final purchase decision. It can also help define cross-selling campaigns or offers aimed at specific audiences more likely to buy.
But AI is not limited to pricing. It also makes it possible to analyze user behaviour within eCommerce. In other words, their browsing journey, which sections they check out, whether they leave the shopping basket, etc. It can then help determine the best way to tackle each of these customer models. It’s no longer enough to send everyone a generic abandoned basket email. Personalized emails are vital.
AI can also help you boost digital communication channels with your buyers. You can recommend products or answer questions in a personalized way. You can even employ bots programmed to speed up incident handling. The goal should be to give users the best shopping experience.
Artificial intelligence to improve eCommerce performance and productivity
You can also use artificial intelligence in retail to improve internal business processes, reduce costs and improve the company’s daily performance. AI has proved useful to:
- Optimize logistics and order distribution.
- Forecast stock and demand to avoid stockouts.
- Improve management of inventory, product portfolio and categories.
- Identify opportunities to sell and design new products for the catalogue to beat competitors.
- Forecast buying trends and supply and demand movements.
- Prevent fraud by users.
Artificial intelligence acts as a catalyst that boosts retailers’ and brands’ performances. It also allows eCommerce to better adapt to various market changes. You don’t need to develop your own AI solution to exploit these benefits. You can trust advanced tools that combine key functionalities, such as the latest pricing software, with automatic repricing and competitor monitoring. Don’t get left behind - join this digital revolution.
1.- IBM Global AI Adoption Index 2022. New research commissioned by IBM in partnership with Morning Consult: https://www.ibm.com/downloads/cas/GVAGA3JP
Category: Artificial Intelligence
