Traditional retail is constantly being dissed by millennials and gen-z as over 3800 retail stores in the USA were shut down in 2018. For a long time now, it has been speculated that brick and mortar stores will eventually die and the future of retail is going to be online shopping. Retail apocalypse is what many most brick-and-mortar stores are afraid of and with millennials representing an estimated $1.4 trillion in purchasing power, the brick-and-mortar retailers certainly can not ignore them.
However, recent studies bring much relief to these retailers as they suggest that millennials and gen-Xers are more than open to the idea of going to a physical store to buy what they want. But, retailers have to amp-up their game to attract these potential customers to their stores using technology. And, this is where AI comes into play. Mainstream brands like Everlane and Warby Parker are now starting to invest in AI for their physical stores.
Rise of Artificial Intelligence
Artificial Intelligence is fueling this click-to-mortar phenomenon. But, for many retailers, the expenses of AI, combined with its limited application has been a problem when it comes to adopting AI. However, conversational agents or virtual shopping assistants are some easily adaptable technologies that do not require rocket science. Because millennials dread human interaction, developing a personalized and seamless interactive system for customer support, product searches, and payments all from the customer’s phone can prove to be beneficial for brick and mortar retailers.
What is a Conversational agent and why is it required?
A conversational agent is a type of text or voice-based Artificial Intelligence, such as chatbots and virtual assistants. Chatbots facilitate text-based interactions, while virtual assistants like Alexa, are voice-based. Because millennials avoid any kind of interaction especially when shopping, conversational agents represent an opportunity to engage with a brand minus the social pressures of human interaction.
Close your eyes and transport yourself to the future for a moment. You step inside a clothing store and you’re here to pick-up an online order. You walk up to a touch kiosk that, using facial recognition, identifies you as a customer. Once identified, your online profile is pulled and your order is brought to you. While you wait, a bot is chatting with you, suggesting potential new products that you’d like in the store.
With retailers increasingly betting on AI to enhance their in-store experience and appeal to the younger generations, this vision of the future is becoming a reality for more and more shoppers around the world.
Matthew Black, CEO of Black Ops says, “We believe that talking to an automated bot is not only a better experience, but they will also soon become the preferred experience. Adding a bot to retail allows a customer to connect their online preferences to their in-store experience, and shop in a more personalized way, instead of based on what a store associate recommends. Currently, young people will browse the web while they’re in-store, utilize social media or text with their friends to shop. Bots enable the brick and mortar retailers to be contextually relevant and join the conversation, continuing the relationship with the user once they leave the store (which would be great for replenishments, rewards, reviews, and other product recommendations). In fact, in China, they are already using bots to connect users in-store to recommend and provide reviews on products in real-time.”
Product Suggestions and reviews are a must for frictionless sales
While shopping online, customers receive a barrage of suggestions and reviews, which in turn pushes the customer towards completing a purchase or even buying multiple products. In the absence of these AI technologies, physical retailers are missing out on the opportunity to let the customer know about products they didn’t know even existed. If such technologies are adapted by brick and mortar retailers, it can really help them increase their sales and footfall considerably.
Basic components of virtual shopping
- Enabling integrations: Software automation technologies are key to maintaining the ability to integrate with foundational building blocks. These building blocks consist of natural language processing, such as speech-to-text, text-to-speech. Additionally, the available software automation technologies and RESTful APIs are helpful enabling these integrations for retailers.
- Designing use cases: Conversational agents can also act as customer support, stylists and the supply chain managers and with technological advancements, their application will only multiply.
In today’s time, a fluid yet consistent customer experience is what millennials, GenZ & gen Xers are looking for. Thus, offering millennials the ability to go into a store and check out without a hitch can help brick and mortar stores stay relevant to millennials in the coming years. And one of the best ways to remove any hitches is AI. Many brands like Lush, Nordstrom, and Sephora have already adopted AI in their physical stores; and in the brave new world of brick-and-mortar retail, you need to run the future to survive the present.