AI (Artificial Intelligence) Trend In The Retail Business

Artificial Intelligence (AI) Trend In The Retail Business

Nowadays, everybody is aware of the existence of Artificial Intelligence (AI). Even though AI was first proposed as a concept in 1950, people were mostly familiar with AI appearing as robots. In recent years, AI has been widely used in diverse forms as a trend for retail. 

However, the application of different AI forms particularly in the retail business hasn’t been recognized as much as it deserves to be. In this article, we will assist you in forming a big picture of the latest AI trends in the retail business.  

What is artificial intelligence?

AI refers to computer science involving the simulation of human intelligence programmed in machines. The programmed machines are capable of mimicking human thoughts and actions. 

How it benefits retail business

AI is now adopted by both online and offline retail businesses in their POS (Point of Sale) system. As reported by the Consumer Technology Association, the top benefits that AI offers businesses in the retail industry are:

  • Cost-saving
  • Increased productivity
  • Automated process & tasks
  • Faster delivery of new products and services
  • Increased innovation
  • Ability to identify new revenue streams

Additionally, AI is playing a crucial role in managing and maintaining customers by understanding their psychology and buying patterns. 

These benefits brought about by AI help businesses optimize their product, improve productivity, upgrade their supply chain and inventory. Hence, the business performance can be enhanced as well.

AI growth in the retail business

During the period from 2019 to 2024, South Asia and Australia/Oceania are the two regions expected to have the highest growth rates of AI trends for the retail market. 

AI in retail market growth rate by region
AI in retail market growth rate by region (2019-2024) (Source: Mordor Intelligence

However, the AI trend for retail in North America is forecasted to account for the largest proportion in the market share, mainly thanks to the presence of technology-advanced countries like the United States and Canada. These countries are concentrating on developing AI-based solutions in the retail space. In fact, North America is the cradle of the primary AI solution providers.  

AI trends in the retail business

Categorized by technology, the 3 most commonly applied AI technologies are Machine learning, Natural language processing, and Computer vision. 

Machine learning

Machine learning is a statistical technique that enables computers to adapt to new data without human programming. Accordingly, computers with machine learning technology can learn about users and customers by analyzing their previous behaviors. 

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The application of machine learning in the retail business is diverse. An example is product recommendations in POS. By adopting machine learning, websites form a big picture of customers’ behaviors according to their previous purchase, searching pattern, etc. Based on that, personalized product recommendations are made. 

Personalized product recommendations in POS
Personalized product recommendations in POS 

Almost all of the e-commerce websites or PWA (Progressive Web App) nowadays have product recommendations as one of their stark features. A retailer that has product recommendations integrated into its website is Walmart. 

Walmart product recommendations
Walmart product recommendations on the website

Natural language processing

Natural language processing (NLP) is the technology empowering computers to understand, interpret, and manipulate human language. NLP systems can capture meaning from both audible speeches and the text of a language (in the form of sentence, paragraph, page, etc.) 

An application of NLP in the retail business is a chatbot. In fact, a chatbot is not a chatbot without NPL. When a customer sends a message with “Hello”, it is NLP that enables chatbots to understand that the customer is presenting a standard greeting. Accordingly, a chatbot leverages its AI ability to figure out an appropriate response. In this case, it is likely a returning greeting. 


An example of NLP benefiting retailers is the fashion bot Enki generated by Asos. Having adopted NLP to improve the performance of chatbot, Asos has witnessed an upsurge in their business performance according to Facebook for Business:

  • 35% more customers reached
  • 3 times increase in orders
  • 2.5 times increase in return on ad spend
Enki fashion bot by Asos
Enki fashion bot by Asos

Computer vision

Computer vision is a form of AI where computers can see the world, perceive and analyze visual data. Furthermore, computer vision facilitates computers to make decisions from the input, or earn an understanding of the environment and situation. 

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The retail application of computer vision includes AI face recognition. AI facial recognition in POS facilitates the identification of new and old customers, identification and tracking of known shoplifters, identification of emotion, etc. 

AI facial recognition in POS
AI facial recognition in POS 

Catching up with the AI trends for retail, CaliBurger, a Californian burger chain of restaurants has installed kiosks with face recognition technology. The kiosks allow customers’ faces to be scanned and read in the store. After that, the kiosk screen will display their loyalty program with past and favorite purchases. 

CaliBurger AI facial recognition kiosks
CaliBurger AI facial recognition kiosks

To wrap up,

The role of AI in the retail business is undeniable. And there is a race of not only retailers adopting AI, but also POS software providers developing AI-based solutions. 

Nowadays, retailers are more and more aware of the advantages of AI and wish to integrate AI-based solutions in their business. Moreover, to the retail businesses that are using a POS system, AI is absolutely a useful add-in to keep your online and offline stores in sync. As a result, it ensures the seamlessness of your POS system for an omnichannel experience

ConnectPOS, one of the most technology-advanced cloud-based POS software, offers you particular 2 AI-based POS features: personalized product recommendations in the PWA consumer app, and AI facial recognition. Contact us for further assistance!

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