6 ways Machine Learning is Transforming Retail

The transformative power of Machine Learning in retail is evident from this study that the spending by researchers on Artificial Intelligence tools including Machine Learning will grow from $ 2bn in 2018 to $7.3 bn per annum in 2022, according to Juniper Research. Machine Learning in particular is transforming the retail industry in a major way by finding its applications in streamlining processes, optimizing prices, forecasting demand, surfacing products in a smart manner and providing a customized, personalized experience to the customer. Below are provided the most important ways for Retail Executives to know in which ML in retail is transformative.

1. Recommendations

You have encountered a product recommendation engine if you have ever been encouraged to buy stuff featured in a section called โ€œFrequently bought togetherโ€ or โ€œPeople who bought this also boughtโ€. In order to determine which recommendations to show to the customer, Machine Learning algorithms will analyze the data they are provided and make connections. For personalization as well, recommendations that are tailored for the individual by use of Machine Learning are a powerful tool for Retail Executives. One of the most famous examples of the use of retail product recommendations is Amazon. Since its early days, it has used Machine Learning to power its product recommendations.

Multiple types of product recommendations are visible on the Amazon website including โ€œGet yourself a little somethingโ€ product and โ€œcustomer who viewed this also viewed.โ€ However, Amazon is no longer the only retailer using Machine Learning to power its recommendations. Other retailers like eBay and Alibaba have been using it for some time as well. Smaller and smaller retailers are now using Machine Learning to power their product recommendations online. They see the potential of Mahine Learning to increase their revenue. Hence, Retail Executives will be well advised to give Machine Learning a go in their business.

2. Visual Search

Another way in which Machine Learning is transforming retail industry which the Retail Executives must be aware of is Visual Search. Visual search and discovery tools that can smartly suggest and present product recommendations that are similar or related to what the customer is searching for, are being powered by Machine Learning as well.

Asos โ€“ the online fashion retailer โ€“ is one fine example. It allowed customers to take pictures of clothing in the offline world and look for alike items on the Asos app. To surface visually similar products, customers can also use images in their photo library.

3. Chatbots

In order to provide more informed product recommendations and aid navigation, some retailers have also incorporated chatbots in their websites. Moreover, to make sense of customersโ€™ feedback and make exchanges more human-like, chatbots make use of natural language processing.

A successful example of using chatbots is the brand North Face. It created a dialogue-based recommendation system by partnering with IBM Watson. It would use the information like weather forecast data and customerโ€™s gender to pin down six products that match the userโ€™s requirements. A point to ponder for Retail Executives is that customers engaged with this chatbot for an average of two minutes, and 60% of the customers clicked through to try product recommendations.

4. Personalized Assistance

Yet another impact of ML in retail that the Retail Executives must keep an eye on is personalized assistance. Here, some retailers have gone a step even further with the development of solutions that act as personal shopping assistant, building one-to-one relationship with the customer and producing highly customized recommendations.

A successful example in this regard is the gifts retailer 1-800 Flowers who developed a highly personalized assistant called GWYN by partnering with IBM Watson. It did so in order to make simple and personalize the customersโ€™ typically hard journey, cultivate one-to-one relationship with a customer and learn from each interaction to develop the most suitable recommendations. As a result, 1-800-Flowers experienced 6.3% increase in revenue by using GWYN, saw an increase in return customers and 80% of customers said they would use GWYN again.

5. Demand Forecasting

It is also important for Retail Executives to know that Machine Learning is also making waves behind the scenes in addition to interacting directly with customers. A suitable demonstration of this competence is Demand Forecasting. To analyze the impact of pricing, promotions, and seasonality, and using it further to make decisions about stock and pricing, demand forecasting is making use of Machine Learning models.

Retail Executives will find it interesting that Machine Learning in demand forecasting has been especially vital for small and medium-scale retailers who do not have access to the data insights of their larger competitors. It allows them to use data effectively without needing a specialist team.

6. Price Optimization

While setting prices, a lot of factors need to be paid attention to by Retail Executives including market positioning, production and distribution costs, product availability and competition. Machine Learning creates predictive models that take all these factors into account and allows Retail Executives to determine the best price of a product in advance which can further enhance the revenues.

Key Takeaway

All in all, these are the ways in which Machine Learning is transforming the retail industry and boosting profits which is useful for the Retail Executives. We highly recommend incorporating it in your business.

To further explore our services in Machine Learning, follow this link.

To breathe in some confidence, check out our profiles on Clutch, GoodFirms, & DesignRush.

Related Blog Posts

System Plus Annual Awards 2022

System Plus Annual Awards 2022

Read More
System Plus Increases Employee Salaries Upto 50% To Fight The Rising Inflation

System Plus Increases Employee Salaries Upto 50% To Fight The Rising Inflation

Read More
SYSTEM PLUS in โ€˜Top 10 Cybersecurity Companies on DesignRushโ€™

SYSTEM PLUS in โ€˜Top 10 Cybersecurity Companies on DesignRushโ€™

Read More
Why is System Plus your Dream Workplace?

Why is System Plus your Dream Workplace?

Read More
System Plus in ‘Top 20 IT Consultants in Pakistan 2021’ category on Clutch

System Plus in ‘Top 20 IT Consultants in Pakistan 2021’ category on Clutch

Read More
Entrepreneurship & Product Management Workshop

Entrepreneurship & Product Management Workshop

Read More
The Future Of Retail: What Do Todayโ€™s Customers Demand?

The Future Of Retail: What Do Todayโ€™s Customers Demand?

Read More
Programming Languages; Why and Which One To Choose?

Programming Languages; Why and Which One To Choose?

Read More
Website Accessibility: Why and How to Make Your Website Accessible

Website Accessibility: Why and How to Make Your Website Accessible

Read More
Native vs Hybrid Web Application Development – Which One to Choose?

Native vs Hybrid Web Application Development – Which One to Choose?

Read More
How loyalty programs can enhance your retail customer experience?

How loyalty programs can enhance your retail customer experience?

Read More
Custom software vs off-the-shelf software: which one to choose?

Custom software vs off-the-shelf software: which one to choose?

Read More
Web Application Development: A Beginners Guide For 2022

Web Application Development: A Beginners Guide For 2022

Read More
Top Mobile App Development Frameworks to Lookout for in 2022

Top Mobile App Development Frameworks to Lookout for in 2022

Read More
Artificial Intelligence: How is it transforming the business landscape?

Artificial Intelligence: How is it transforming the business landscape?

Read More
The Future of AR and VR: How will it look in 2025?

The Future of AR and VR: How will it look in 2025?

Read More
IoT: The New Reality of Retail

IoT: The New Reality of Retail

Read More
Our client Instashowing raises $4 million in seed round funding

Our client Instashowing raises $4 million in seed round funding

Read More
Post-Pandemic Back-to-School Retail Trends 2021

Post-Pandemic Back-to-School Retail Trends 2021

Read More
Ways to Protect Your Business from Cyber Attacks in 2021

Ways to Protect Your Business from Cyber Attacks in 2021

Read More
5G Technology: Itโ€™s impact on the mobile app development industry

5G Technology: Itโ€™s impact on the mobile app development industry

Read More
How to Revamp Your Website for a Better Customer Experience?

How to Revamp Your Website for a Better Customer Experience?

Read More
Blockchain: How will it disrupt the business landscape?

Blockchain: How will it disrupt the business landscape?

Read More
6 Key Reasons Why You Should Invest In Technology

6 Key Reasons Why You Should Invest In Technology

Read More
6 Reasons Why Custom Software Development Is The Best Approach

6 Reasons Why Custom Software Development Is The Best Approach

Read More
Mobile App Development: 5 Trends That Will Dominate in 2021

Mobile App Development: 5 Trends That Will Dominate in 2021

Read More
8 Things executives should know about Artificial Intelligence

8 Things executives should know about Artificial Intelligence

Read More
6 ways Machine Learning is Transforming Retail

6 ways Machine Learning is Transforming Retail

Read More
4 ways Artificial Intelligence is revolutionizing Fintech

4 ways Artificial Intelligence is revolutionizing Fintech

Read More
Machine Learning in Finance: What Executives should know?

Machine Learning in Finance: What Executives should know?

Read More
6 Key Risks of Artificial Intelligence in 2021

6 Key Risks of Artificial Intelligence in 2021

Read More
AI in Healthcare; A guide for Executives

AI in Healthcare; A guide for Executives

Read More
4 Ways Machine Learning is Revolutionizing Mobile App

4 Ways Machine Learning is Revolutionizing Mobile App

Read More
{"slide_show":3,"slide_scroll":1,"dots":"false","arrows":"true","autoplay":"true","autoplay_interval":"5000","speed":300,"loop":"true","design":"design-2"}

Tell Us About Your Project







    Please prove you are human by selecting the Plane.