AI in Retail. 2021 Trends

February 25, 20210

Today, consumers want more than just amazing products; they also want to have amazing experiences. This is where artificial intelligence (AI) comes into play.

AI is what enables machines to be able to learn from experience, adapt to new inputs, as well as carry out human-like activities. In other words, this area of computer science focuses on creating bright machines that work and react the way humans do. In general, it can be broken down into three groups: artificial narrow intelligence (ANI), artificial general intelligence (AGI), and super artificial intelligence (ASI). The question is, which one is applicable to retail and why?

Artificial Intelligence in Retail

Artificial intelligence is the next big step in the development of retail. It helps set optimal prices for goods much more accurately than people are able to. Through the use of chatbots and automation, for instance, companies are able to learn more about their customers so they can personalize services.

AI in retail falls under the first group, artificial narrow intelligence, as it only performs one highly focused task versus a large number of diverse tasks. This hyper-focus on a single task is why AI is so useful for modern retail.

Benefits of AI in Retail

  • Setting optimal prices for goods
  • Sales forecasting
  • Reducing the number of errors; the algorithm is constantly improving itself as it continues to collect and analyze data
  • Minimizing risk. Every decision from promotional campaigns or hiring new staff is recorded and available for further analysis.
  • Taking over routine tasks. Category managers and other retailer staff are able to focus their attention on more strategic tasks as AI takes over the process of tedious data collection and analysis.

Examples of AI in Retail

Although AI is still quite costly to implement, it hasn’t stopped some of the biggest retailers from trying it out, and it’s proven to be quite beneficial.

North Face

This outdoor retailer has implemented IBM’s AI supercomputer Watson in order to help create a personalized online shopping experience for each user. It allows shoppers to filter their item selections by answering a few questions. Therefore, instead of making the customers go through all of the products offered to find what they want, the bot helps them make their selection much easier and faster.


Ticketmaster decided to use artificial intelligence in order to deal with ticket fraud, which had been negatively impacting customer shopping experiences for some time. They started off by creating a much bigger bot that was able to fight off other bots that were purchasing their tickets and reselling them at much higher prices. This AI bot works by analyzing each customer that registers on the site to ensure that those who are buying the tickets are actual human beings. The AI-powered bot seems to be doing a good job as well, as there are much fewer third-party ticket vendors nowadays.

Domino’s Pizza

With the help of AI, Domino’s has made it deliciously easy to order a pizza. They created a Facebook Messenger chatbot named Dom who lets customers make an order just by sending a message with the word, “pizza”. The bot then goes through the message details and places the order for them. This ends up being a much faster process than if the customer had called or driven to the store to order.


As a music streaming company, Spotify heavily depends on data. Artificial intelligence lets Spotify hold onto more customer data so they can analyze trends and make predictions of what music a user might like. Spotify is able to offer users their own “Discover Weekly” playlist generated by AI data that offers music to each user based on their personal preferences. Many users claim that the playlist is spot-on.

Google Photo

Google Photo takes advantage of AI in order to alleviate their users of cumbersome tasks such as going tagging, labeling, and organizing photos. Now, photos are automatically labeled whenever users upload them based on people, location, date, and other criteria. As a result, it is much easier for users to find specific photos.


Artificial intelligence has seemingly endless capabilities, including enhancing your customer’s user experience or optimizing your prices. There is likely one or more ways your company can implement AI to improve your business strategy. The key is to focus on the needs and wants of your customer base. With AI, you can provide your customers with better prices and better service for a refined shopping experience.