The world of technology is growing exponentially, and retail is no exception. AI, machine learning, and large language models are altering the retail landscape, reshaping each customer touchpoint.
What can brands do with AI in retail tech?
Imagine walking into a store where the staff already knows your preferences, recent purchases, and even your mood. That level of personalized service makes you feel special, right? AI offers the possibility to create those bespoke experiences that make every customer feel understood. In this blog, we’ll explore how AI helps businesses—whether you’re a retailer, entrepreneur, or business owner—create personalized experiences for customers worldwide. We’ll also delve into the importance of using a unified platform like XY to amplify the impact on loyalty and retention.
Understanding Your Customer
At the core of personalized experiences is one simple truth: you need to know your customer. In a typical shopping center, the front aisles are designed for mass appeal. However, creating a personalized experience in luxury retail requires more than a standard setup—it demands an “endless aisle” of possibilities, narrowed down to each customer’s unique needs and desires.
How do we get there?
It’s not just AI on its own. It’s the power of knowing your customers well enough to offer them what they need, no matter where they shop. AI helps gather accurate data, mapping customers’ behaviors and preferences. A centralized repository—compiled from in-store purchases, online activity, and even social media interactions—creates a complete picture of each customer. Platforms like XY give retailers this unified view of customer data, making personalization seamless across all touchpoints.
AI in Action: Real-World Retail Examples
AI is already making waves in retail. Consider Amazon’s example: using customer purchase history, browsing habits, ratings, and reviews, their AI algorithms can tailor product recommendations to specific customer segments. Amazon also pioneered the “walk-out” shopping experience, where customers can leave the store with their items without needing to stand in checkout lines. This kind of frictionless shopping delivers exactly what customers want—convenience and speed.
Let’s look at other examples:
- Olay uses AI for personalized skincare recommendations without the need for a dermatologist. Their Skin Advisor tool provides users with skincare suggestions based on a simple selfie.
- H&M leverages AI for inventory management, ensuring that best-sellers are always in stock.
- Zara has implemented robotic order fulfillment, allowing customers to collect their purchases in-store by entering a code, which prompts a robot to retrieve their order from the warehouse. It’s fast, efficient, and seamless.
(Source: Forbes article on AI in Retail)
AI-Powered Personalization: Elevating Customer Experience
Let’s dive deeper into personalization. When AI powers the customer experience, it enables you to offer highly tailored product suggestions. Picture a customer who recently purchased a handbag—when they visit your store next, AI can recommend a scarf or shoes that perfectly complement that handbag.
This kind of personalization relies on more than just AI. It requires a unified system that breaks down data silos, ensuring every interaction across various touchpoints—online, in-store, and beyond—is consistent. Legacy systems often lack this level of integration, but with platforms like XY, businesses can streamline operations and offer a seamless customer experience.
For example, large language models (LLMs) can power chatbots that engage with customers in real time, offering product recommendations, answering questions, and even assisting with purchases. This improves service and boosts customer satisfaction, all while reducing the time it takes to resolve queries. Instant solutions mean fewer lost sales and higher conversion rates.
Another advantage? Targeted marketing. AI analyzes customer behavior to deliver relevant promotions, offers, and discounts at just the right moment—when the customer’s attention is fully engaged. In today’s fast-paced world, you only have a few seconds to capture that attention. Delays in payment processing or engagement can lead to missed sales opportunities, making real-time AI-driven responses crucial.
Omnichannel Integration: The Future of Retail
With AI and machine learning becoming more advanced, omnichannel integration is now a necessity for retailers who want to thrive. It’s no longer just about online or in-store—it’s about creating a seamless experience across all channels, whether mobile, online, or physical locations.
AI helps bring this omnichannel experience to life. Retailers can track inventory across multiple stores, allowing customers to pick up items or make purchases wherever it’s most convenient for them. AI also enables predictive analytics, helping businesses anticipate customer behavior and trends, which enhances inventory management, marketing efforts, and the overall shopping experience.
The Power of a Unified Platform: Why XY?
While AI enhances personalization, it’s platforms like XY that make these capabilities truly shine. XY’s headless architecture gives businesses a competitive edge by providing a single, unified view of customer data, all accessible at your fingertips.
With XYMobi, for example, you can view comprehensive analytics that shows how each store is performing, whether it’s the store manager or individual sales associates driving revenue. In just a few clicks, you can pull up a customer’s entire purchase history, enabling even more personalized service.
Moreover, XY’s unified platform integrates seamlessly with your existing systems, taking care of everything from inventory management to CRM. This eliminates the need for multiple, disconnected systems that fail to communicate effectively. XY is designed to address common pain points in retail and scale alongside your business as it grows.
Personalized experiences boost customer loyalty and reduce churn, but they’re only possible when all systems—from front-of-house to back-end operations—are aligned. XY ensures that everything works in harmony, allowing you to focus on what really matters: delivering exceptional customer experiences.
The Future of AI in Retail: Beyond Personalization
As retail technology continues to evolve, the role of AI will only grow. According to Fortune Business Insights, the global AI in the retail market is projected to soar from USD 9.36 billion in 2024 to USD 85.07 billion by 2032, with a CAGR of 31.8% during that period. (Source: Fortune Business Insights)
While online shopping surged post-COVID, much like remote work evolving into hybrid work models, customers still enjoy the convenience of in-store shopping. Retailers are responding by blending the best of both worlds. According to McKinsey, sales in the e-commerce sector—especially in apparel, department stores, and beauty—have risen by nearly 10 percentage points since the pandemic. (Source: McKinsey Report)
Moreover, Statista projects that global transaction values in the Mobile POS Payments market will reach US$3.76 trillion by 2024 and will possibly double by 2028, i.e., US$6.08 trillion. (Source: Statista)
AI is also being used to enhance the in-store experience with augmented reality (AR). Predictive analytics and AI-powered AR features create dynamic shopping experiences that delight customers and boost sales. Retailers who embrace these technologies will be at the forefront of the next retail revolution.
Conclusion
AI alone is not the solution to transforming retail experiences, but when combined with a unified platform like XY, it becomes a powerful tool. XY’s platform helps retailers create customer experiences that resonate, scaling businesses and keeping operations aligned across the board.
Whether you’re looking to enhance personalization, streamline operations, or scale your business globally, XY is the only platform you’ll ever need. Ready to transform your retail operations and elevate your customer experience? Book a call today and let us help you create unforgettable retail experiences that your customers will cherish.