Artificial Intelligence in Retail- One Big Flop?

Artificial Intelligence in Retail- One Big Flop?

Companies overestimate Artificial Intelligence in Retail. Retail behemoths Target and Amazon are investing resources into machine learning, which may not prove to be worthwhile. The issue is, most of what is being coined “AI” in retail is not true Artificial Intelligence.

Using the “AI” that worked online in physical stores comes with risk. Larger trends towards automation could be overlooking how important physical presence is in the shopping experience.

AI myths & AI hype

Many retailers are forgetting what really helps customers: In-store assistance from human workers. People that can individually help with shopping needs. Artificial intelligence can help human employees with that task. The two can work in tandem. 

In the retail world, products like Amazon Alexa and chatbots are commonly referred to as AIs, but this is not the case. These tools are simply sophisticated programs built on top of machine learning, natural language processing, and statistical algorithms.

There’s also a lot of hyperbole around machine learning and analytics that conceals a people problem. Used that way, machine learning needs vast amounts of data that needs to be formatted and cleaned for use. Computers aren’t good at automatically cleaning data; humans are. 

The technologies we use today are hobbled by this. In order to receive clean data for machine learning, for instance, many retailers send customers questionnaires which are easier for computers to process. 

Customers aren’t AIs. Most never answer the questionnaires, and many fill whatever they remember. This leaves retailers with faulty but Bigdata.

Meanwhile, Amazon and other online-first retailers understand every bit of customers’ purchase and shopping habits. Their machine learning models see all the data. However, brick and mortar retailers know little about the items you picked up, glanced at, and put back on the shelf or what you looked at next. 

In brick-and-mortar stores you simply can’t get data to use machine learning wholesale; but you do get to meet and greet the customer. You need better questions to take advantage of the same “AI” tools. Not being a website is an advantage.

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