How Human-Centric AI is Changing Canadian Retail
There’s growing enthusiasm for artificial intelligence (AI) and, more specifically, generative AI (genAI) among retail decision-makers. At the start of 2024, 72% of retail leaders were to implement the technology, according to a Google Cloud survey.
GenAI can automate repetitive tasks and processes, allowing retail businesses to save time, money, and resources. However, it can also be applied to more human-centric tasks, such as creating personalized and targeted marketing campaigns, improving recommendations for customers, and enhancing the overall customer experience.
In this article, we explore how human-centric AI is changing Canadian retail. We'll also outline how Walmart Canada has incorporated AI into its shopping experience to empower customers.
Personalized Shopping Experiences
Perhaps the most notable example of human-centric AI is personalization and, more specifically, automated personalization.
Personalized experiences hold great value for customers. Companies using advanced personalization achieve higher ROI, stronger customer loyalty, and increased customer satisfaction. According to McKinsey & Company, personalization "can reduce customer acquisition costs by as much as 50 percent, lift revenues by 5 to 15 percent, and increase marketing ROI by 10 to 30 percent."
Meeting Customer Expectations
Furthermore, consumers now expect a personalized shopping experience; it’s no longer just a nice-to-have but an essential aspect of retail.
AI-powered personalization goes beyond segmenting customers based on demographics and purchase history. It utilizes machine learning algorithms to analyze vast amounts of data, learn from customer behavior, and adapt in real time.
By analyzing customer data such as purchase history, browsing behavior, and preferences, generative AI algorithms can create personalized recommendations and offers. This enhances the shopping experience and increases the likelihood of conversions.
Enhanced Supply Chain Operations
AI is revolutionizing supply chain operations by making them more efficient and resilient, benefiting both the workforce and consumers. By leveraging AI-driven automation and machine learning, companies can optimize inventory management, predict demand accurately, and streamline logistics.
These advancements reduce human error, improve productivity, and allow employees to focus on more strategic tasks, fostering a more fulfilling work environment. Human-centric AI means workers are supported by intelligent systems that enhance decision-making and problem-solving rather than replace them, ultimately leading to greater job satisfaction and career development opportunities.
Reliable Service for Consumers
For consumers, the impact of AI on the supply chain translates into better service and reliability. Enhanced demand forecasting ensures that popular products are always available, reducing stockouts and backorders.
AI systems can quickly identify and resolve potential disruptions in the supply chain, such as delays or shortages, ensuring timely deliveries. This leads to a consistently positive shopping experience, increased trust in the brand, and higher customer satisfaction.
By making supply chains more responsive and customer-focused, AI contributes to a seamless and enjoyable retail experience for consumers.
Perfecting Product Development
Product development is a challenging endeavor, with a high failure rate for new market entries. An article by MIT Professional Education states, "Nearly 30,000 new products are introduced each year, and 95% of them fail according to Clayton Christensen, a professor at Harvard Business School."
Achieving product success requires a deep understanding of customer needs and preferences. Traditionally, this understanding was supported only by manual research, surveys, and other types of consumer studies.
Empowering Product Development Teams
Generative AI can enhance product development by analyzing customer feedback, market trends, and competitor data to generate insights and recommendations.
This empowers product development teams with more insight into their customers' wants and needs, which they can then use during product development. Inevitably, this process leads to products that better meet customer needs, boosting satisfaction and competitiveness.
Case Study: Walmart Canada Empowers Customers with Conversational AI
Walmart Canada is at the forefront of integrating conversational AI to enhance the customer shopping experience. By leveraging technologies such as natural language processing (NLP) and natural language understanding (NLU), Walmart makes it possible for customers to effortlessly reorder items through voice and text.
According to a 2023 press release on the topic, "Comprehending users’ real-time conversations across multiple countries including, the U.S., Canada, Mexico, Chile, and India, requires understanding natural languages with all its associated context—including being knowledgeable about catalogs containing hundreds of millions of products and indexes of retail language—as well as deciphering users’ localized languages and needs."
Delivering Key AI-Enabled Services
With services like Walmart Voice Order and Text to Shop, customers can add products to their carts, schedule deliveries, and manage their shopping lists simply by speaking to a smart device or sending a text message. These systems recognize customer preferences and intents, making the shopping process faster and more personalized, thereby saving time and ensuring a better overall experience.
This use case provides a powerful example for other companies looking to provide customers with more intuitive and efficient ways to shop. By incorporating conversational AI, companies can extend personalized services beyond the traditional online or in-store experience.
A Prime Example of Human-Centric AI
Most importantly, this customer-centric approach is a prime example of human-centric AI, which emphasizes creating technology that understands, assists, and enhances human actions. Beyond supporting customers, Walmart's use of conversational AI also aids associates through tools such as the voice assistant, "Ask Sam."
This AI enables associates to quickly locate items, access important information, and streamline their workflow. By focusing on the needs and convenience of both customers and employees, Walmart's innovative use of AI is setting a new standard for efficiency and satisfaction in retail.
Discover More Human-Centric Use Cases of AI
Retail brands are only just beginning to explore the human-centric potential of artificial intelligence. Moving forward, we can expect to see more businesses harnessing AI's capabilities to improve supply chain operations, enhance customer service, and transform product development.
To learn more about how your brand can improve the lives of your customers and employees with AI, don't miss eTail Toronto 2024. It’s happening from September 25th to 26th at the Hyatt Regency Toronto in Ontario, Canada.
Download the agenda and register for the event today.