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Retail Innovation Update

Retail Innovation Update

In light of the acceleration of the online shopping trend due to the pandemic, retailers are trying to make the e-commerce experience better and the return logistics process easier and more cost effective. They are looking to innovate using AI technology to not only reduce the number of returns, which in turn would reduce cost, but also improve the customer experience on online channels by making it more personalized. 

In addition to being more proactive about soliciting feedback and comments from consumers through product reviews, many retailers are implementing “right sizing” and “augmented reality” tools on their websites to limit the probability of returns as customers can virtually try the product. Some retailers are heavily investing in AI to provide a personalized experience to promote impulse shopping. This is mostly through the technology that shows customers products they previously searched for or products similar to those in their cart. 

Analyzing Product Feedback and Reviews 

Product feedback and reviews are essential for allowing consumers to understand how the product performs from consumers who have already purchased the product. As a result, providing the tools for shoppers to easily filter through these reviews is becoming paramount to facilitate the purchasing decision. Furthermore, it is not enough for the retailer to just know which products are in demand, and which products are not, retailers need to understand which product are being returned and why, and then action that information. The analysis of this information allows them to make decisions about products to sell, or not sell, as well as suppliers to use, or not use.

“Right Sizing” and Augmented Reality Tools

These tools allow consumers to virtually test out the product for fit or suitability prior to making the purchase decision.  Whether it is a sizing tool that allows a consumer to choose a size from a retailer they normally shop at to provide the size equivalent, or augmented reality tools that allow, for instance the upload of a room picture and then digitally change the paint color or add furniture using AI. These tools make it easier for consumers to assess the suitability of the product quickly and more accurately, and then make the purchase while limiting the likelihood of a return.

Impulse Shopping Online 

Although many consumers do make impulse shopping decisions online, many retailers are trying to increase cart sizes through impulse shopping similar to the way they try to get people to pick up items while waiting at checkout in bricks and mortar stores.  As a result, retailers are investing heavily in AI that shows additional items based on numerous factors i.e., the items the consumer is searching for, items they have purchased previously, what others have bought or looked at, or even the season, time of day and weather.  Even McDonald’s is making improvements to drive impulse buys with their $300 million investment in Dynamic Yield back in 2019.  This AI technology focuses on providing a personalized customer experience, originally for their self-serve kiosk and drive through screens, which would dynamically change based on the time of day, weather, and items being ordered.  This technology has also been rolled out onto the McDonald’s app, which has had a positive impact on both the customer experience and the bottom line.