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Publicado em Aug. 12, 2020

The potential positive impacts of artificial intelligence on the retail sector

AI is no longer just a way to stay ahead of the competition - it has become an essential part of staying relevant in the industry and maintaining innovation.

Rob Saker in his blog TotalRetail mentions that Artificial Intelligence (AI), is being used as a differentiating factor among smaller retailers, as a way to move forward and capture market share. The gap between adopters and non-adopters will continue to widen, meaning that AI is no longer just a way to stay ahead of competitors - it has become an essential part of staying relevant in the industry and maintaining innovation.


The interest in the application of artificial intelligence in the retail sector has been very significant, Google Trends clearly observes this trend between the period of 2016 to 2020.



Blake Morgan in an article published in Forbes defines that the basic retail experience hasn't changed much over the years: go into a store, look for the right product and make a purchase. Artificial intelligence has the potential to completely transform the traditional retail experience and take it to the next level with customization, automation and greater efficiency.


The technology's potential can be realized by the sector's investments in artificial intelligence, Accenture reports that investing in AI collaboration and user experience can increase retail store revenues by 38% by 2022. In addition, 72% of stores retailers said smart technology will be critical to their organizations' market differentiation. And AI is expected to add $ 16 trillion to world GDP by 2030.


The proof of the effectiveness in the adoption of artificial intelligence in the physical retail sector is more evident when observing major players in the market using it as a competitive differential, for example Amazon opened in the city of Seatle, its first complete supermarket, Amazon Go Grocery, The establishment has scattered cameras with computer vision technology so you can take what you need and leave without going through any queue: everything is automatically charged to your Amazon account. (WINTERMEIER, 2020)



Figura 1 - A entrada de uma loja Amazon Go (Foto: André Fogaça/Tecnoblog)

Figure 1 - The entrance to an Amazon Go store (Photo: André Fogaça / Tecnoblog)


IKEA's 'Place' augmented reality app allows customers to see how IKEA furniture fits into their home spaces. IKEA has more than 817 million customers per year and is one of the "most loved companies in the world", the user experience is enhanced, especially when we think about the pandemic period, when visiting a physical store is partially compromised.



In the digital retail scenario, applications are even more potent, we can mention the case of Pinterest that recently introduced an updated chrome extension that allows users to search any product online through an image, in practice this means an amplification in interactivity of the customer when faced with a picture of a man wearing a cowboy hat and jeans and thinking about “cool jeans!”, now you can hover over the jeans and Pinterest’s “visual search” technology will allow you to browse on similar products by the same retail store.



Another extremely disruptive solution is the case of IFOOD, which at the height of its exponential growth invested US $ 20 million in research and implementation of machine learning, deep learning, logistics efficiency and others related to the company's ecosystem, in this way The iFood application recommends restaurants and dishes according to the user’s taste through models processed in AWS. The company is able to control what will be shown in the application, strategies and promotions thanks to these algorithms and as a result iFood has been achieving significant productivity gains and improvements in service levels. In the logistics area, the distance traveled by the delivery man was reduced by 12% thanks to the optimization of routes. The same happened with the downtime of these professionals, which was reduced by 50%, this had a positive impact on the delivery SLA, which jumped from 80% to 95%.


Artificial intelligence solutions are by no means a universal panacea, however the current questioning is not restricted to the scope of adoption or not of the technology, but why not to adopt, in view of such expressive results in the sector. Estimates are that 80% of the savings will come from the improvement of AI in supply chain management and returns, as well as retention, as the customer does not have a loyalty rooted in the brand, but in the shopping experience, seeking companies that know their preferences and make product recommendations that reflect their expectations. Thus, the current challenge is to innovate or risk losing to more experienced and technologically advanced competitors.


SAKER, Rob. The Impact of Artificial Intelligence in Retail. Available at <https://www.mytotalretail.com/article/the-impact-of-artificial-intelligence-in-retail/>. Accessed on 06/08/2020.


KOROLOV, Maria. Retail AI: survival will depend on intelligence. Available at <https://cio.com.br/ia-no-varejo-sobrevivencia-dependera-de-inteligencia/>. Accessed on 07/08/2020.


WINTERMEIER, Nikole. 9 Innovative AI Use Cases in Retail. Available at: <https://blog.crobox.com/article/future-of-retail>. Accessed on 08/09/2020.


MORGAN, Blake. The 20 Best Examples Of Using Artificial Intelligence For Retail Experiences. Available at: <https://www.forbes.com/sites/blakemorgan/2019/03/04/the-20-best-examples-of-using-artificial-intelligence-for-retail-experiences/#76039cbb4466> Access on 08/05/2020.

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ROGERIO  BERNARDES ANDRADE
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