4 min read

How the Rise of AI is Changing the Face of Retail

On 19th October 2016, speaking at the opening of the Leverhulme Centre for the Future of Intelligence, Stephen Hawking said: “In short, the rise of powerful AI will be either the best, or the worst thing, ever to happen to humanity. We do not yet know which.”

Although we are all hoping for the former and not the latter, it’s still too early to tell. However, the rise of AI is beginning to influence several areas of our everyday lives.

Artificial Intelligence and Machine Learning are no longer confined to the realm of Science Fiction. Ever since IBM’s Deep Blue beat world chess champion Gary Kasparov in 1997, public interest in the development of AI has grown.

Over the past 20 years or so, AI has gone from strength to strength, with more and more companies recognising the potential of Machine Learning and developing their own technologies. As well as giants like Google and Amazon, many of these companies sit in the Retail Sector. How could AI affect retail marketing from an SEO perspective, is a question on SEO experts’ minds. If retailers are already making SEO mistakes, who knows what AI could impact!

Brick and mortar stores

 So far, AI is common in high street supermarkets, as well as some retailers like Boots and Zara, in the form of self-service checkouts. Taking it even further, Amazon have been rumoured to be implementing more of their Amazon Go stores after their first one opened in Seattle. These stores will use cameras, sensors and an app to eliminate the need for any checkouts.

Amazon Go

{Image Credit: www.retailgazette.co.uk}

Some people think this will catch on, like JD.com boss Richard Liu, who said: “sooner or later, our entire industry will be operated by AI and robots, not humans”. However, there appears to be a need for balance between AI systems and human interaction, with supermarket chain Morrisons re-introducing human cashier checkouts for small baskets after replacing them with self-service systems. Maybe we’re not ready for a completely staff-less shopping experience just yet, but that doesn’t mean it’s not on the cards.

The use of AI is arguably more prominent behind the scenes, in the supply chain. For example, logistics firm XPO have deployed 5,000 intelligent robots in their warehouses to cut down the time it takes to process customer orders. Working alongside human warehouse operatives, these robots are also apparently tackling the heavy lifting and moving large amounts of inventory, resulting in a safer work environment.


While this all sounds very positive, the looming fear that robots will be replacing humans in various positions throughout the Retail Sector is becoming more and more pronounced. So much so, that the British Retail Consortium has estimated that 60% of retail jobs could be at risk in the next 20 years due to ongoing automation. Taking this into account, it seems as though the rise of AI presents itself as a double-edged sword.

Online retailers

Switching focus to the online world, it’s clear that Machine Learning is coming on in leaps and bounds. Fashion retail giant ASOS have implemented a “Find my size” Fit Assistant function that enables users to input basic information about their body type and fit preference, to receive personalised advice on which size to purchase. These recommendations are based on the percentage of customers who inputted similar information and who did not return a particular item of clothing, and is designed to improve UX while also attempting to reduce the volume of returned items.

ASOS Fit Assistant

{Image Credit: Screenshot}

Outdoor clothing company The North Face have also experimented with Machine Learning, in the form of a conversational Question-and-Answer style interface which potential customers can use to find the perfect jacket. By using Machine Learning, the software can glean information from the interactions and start to pick out patterns, making it a powerful tool for increasing revenue.

Marketing and Search

When considering the use of AI in Retail Marketing, there is much to consider. According to a report by We Are Social and Hootsuite, there are approximately 40,000 searches processed every second. Every year, we spend the equivalent of 1 billion years online. These staggering statistics put in perspective just how much data there is for Marketers to analyse.

Artificial Intelligence is integral to being able to make sense of this monumental amount of data, which Marketers can use to their advantage. They can gain valuable audience insights from data showing consumer buying patterns, as well as more accurate demand forecasting and better ad targeting.

While on a specific website, you might be struggling to find exactly what you’re looking for, or unwilling to sift through the huge catalogue of products. Some companies have found a solution to this issue in the form of an AI chatbot. Chatbots are an excellent way to partially automate the answering of FAQs, and can also be used to direct customers towards certain products.

American beauty retailer Sephora are using a Facebook Messenger chatbot, Sephora Assistant, to make it easy for customers to book in-store makeovers, as well as providing tips, how-to guides and product reviews in a conversational manner. According to a Facebook Business report, the Sephora Assistant saw an 11% rise in booking rates, which would consequently increase footfall in stores.

Sephora Assistant

{Image Credit: www.sephora.com}

Machine Learning can also play a vital role in remarketing. If you’ve ever been shopping online, looking at a few specific products but not making any purchases, you may have noticed that the same products you were browsing are served back to you in ads. There may also be a few products in there that you weren’t specifically looking at, but have been shown to you because they fit your browsing patterns. This is Machine Learning tracking what you’ve been looking at and showing those products to you after you’ve left the site as a reminder to complete a purchase.


It’s clear that Artificial Intelligence is already having a huge impact on the Retail Sector, which is sure to carry on growing as more sophisticated technology is developed.

As more and more processes are automated, and more online conversations are carried out with chatbots, will the Retail Sector find that they suffer from the lack of human contact and involvement? Will the replacement of human workers with intelligent robots be deemed efficient, or will there be public outcry at the loss of jobs?

Stephen Hawking was right, it’s far too early to know just what the rise of Artificial Intelligence will bring. But, as there is no sign of it slowing down any time soon, it’s clear there will be many more developments on the horizon, and not just in the world of Retail.

Let us know your thoughts on how AI is changing the retail industry and comment below or tweet @honcho_search.

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