The presence of artificial intelligence technology in everyday life has grown incredibly over the last decade and it shows no signs of stopping. Today, AI is all around us, helping make life easier for everyone who uses it. Some uses of AI are easily seen, like when people use Google to search or ask Siri a question, while others are less visible, like when vocal tone analyzer Cogito helps the customer service representative you’re talking to communicate with you better. And while AI has been a presence in the tech world since the 1950s, it’s only in recent years that it has started transforming the online retail experience.

AI and Retail

The use of artificial intelligence in retail has begun to replace traditional modes of increasing sales. In the past, retail companies had human employees analyze customer data, guess what would increase sales, and then implement a marketing plan. AI can do all of this but much more quickly, objectively, and with immediate implementation of new sales strategies. Plus, AI can sort huge amounts of data about the way customers shop and use all that data at once to improve the customer experience, which, in the long term, helps ensure customers keep coming back.

So, what are some ways AI improves sales and the customer experience? One way is by giving customers personalized product recommendations. When people shop online, they’re faced with an incredible amount of buying options. Studies have shown that, while customers like having lots of options, they also become overwhelmed when there are too many to sort through. Using AI to give customers personalized recommendations based on their unique data gives them fewer, but much better options to choose from.

AI can also help predict the way customers shop over time. This allows retailers to perfectly time their personalized recommendations, as well as schedule follow up emails at optimized times.

Another way retailers use AI is in their customer service. Excellent, fast customer service is incredibly important to consumers, especially in the densely saturated online market. If people find that a company has poor customer service, they’re likely to simply change where they buy from in the future. AI helps retailers by increasing the speed and efficiency of their customer service. By using things like chatbots and unique automated responses, retailers can make their customers feel heard much more quickly and can more easily resolve any customer issues.

Modern Retailers Using AI

While AI is relatively new to the retail world, there are a few companies that are already using it to great success. Perhaps the most notable example is Amazon. Amazon’s analysis of their customer’s unique habits and data has allowed them to maximize their sales and dominate the online retail world. In particular, the use of personalized recommendations has been massively successful for the company.

Fashion retailers are also using AI, like luxury retailer Net-a-Porter and outdoor clothing retailer North Face, which uses AI powered by IBM’s massively powerful Watson to help their customers find the clothes that are best suited to their tastes.

AI is also making its mark at luxury jeweler RockHer. RockHer’s ROSI, a blend of a proprietary algorithm and AI-enhanced by IBM’s Watson, helps customers through the diamond buying process. ROSI takes the stress out of buying a diamond by having customers answer a few questions, then showing them only the very best diamonds for their needs and budget. The use of AI to help reduce the confusion of buying a diamond, something most men find very stressful, is another way the technology is making shopping online easier, faster, and better for consumers.

The Future of AI and Retail

While there are many applications of AI in the retail world now, this is really only the beginning. As AI improves over time, the many ways retailers use the technology are only going to increase. And many companies are seeing the benefit of getting in on the AI game early— a recent study showed that 3 out of 4 retailers are planning to invest in AI over the next 24 months. While the full future impact of AI in retail remains to be seen, one thing is certain: it’s going to be big.