How AI will change your shopping habits

AI shopping illustration

Artificial intelligence (AI) is influencing everything from photography to gaming, home entertainment, education and autonomous vehicles. AI is also reinventing the way we shop.

AI has the potential to impact many industries, from healthcare to manufacturing. The University of Waterloo is just one of many companies and institutions that has opened an AI institute dedicated solely to complex and detailed research on the technology’s applications.

The more you buy, the more the AI learns about you.

But in the context of shopping, AI can be as simple as intelligent algorithms used to track what items you search for on Google and other online retailers, or what business pages you follow on social media. The information can then be used to deliver personalized recommendations and predict preference — even when you’re about to run out of milk or cereal and might be looking to re-stock your fridge and pantry. AI can make marketing more customized and personal, eliminating the task of scrolling through a number of ads that aren’t relevant to your needs.

AI is all around

Many companies are already actively using AI to change the way we shop. Stitch Fix Inc. puts together and delivers curated subscription boxes of clothing for its customers and uses AI to determine what types of clothes their shoppers like, their sizes and their personal style. Customers are asked to rate images of clothing, then selects items based on the analysis of that information.

The more you buy, the more the AI learns about you. Adidas recently partnered with Findmine to assist with the “Complete the Look” feature on its site. In addition to reducing the human hours required to manage the section, the process has helped the company cut the duration of the process for customers by 95 percent and increase the number of items that appear in the featured results by an impressive 960 percent.

milennial on laptop sitting on bed

Chatbots represent another way AI can intelligently help customers, delivering product recommendations by analyzing answers to questions. 1-800-Flowers uses an AI Chatbot called GWYN (Gifts When You Need It) that is based on IBM’s Watson and helps customers place orders in a conversational fashion, learning each customers’ habits over time to offer a more personalized shopping experience. Clothing retailer The North Face, meanwhile, uses a chatbot that’s also powered by IBM Watson to recommend clothing based on where you might wear it, and what activities you’ll be doing.

And AI isn’t just for online; it can be used in physical shops to track how many people visit, where they walk, which areas are visited the most, how many people leave with a purchase and even how often a product is picked up.

Robotic shopping assistants that help customers by leading them to areas where their desired items are located, or help them search for items via voice or small screens, represent the future. Pepper the robot, developed by SoftBank in Japan and widely used in that country, is also employed at several ATB financial institutions in Calgary, helping customers learn about products and services, and offering an interactive, informative and fun experience at the same time.

Your personal shopper is an algorithm

kids cross street with shopping bags

By using AI software, businesses can gather detailed information about specific customers, like their purchase history, how often they return to the store, if and when they’ve made any returns and why. After the data is collected and analyzed, the goal is to predict future behavior, make tailored recommendations, increase sales, and more strategically reach individual customers.

The level of personalization afforded by AI can not only encourage customers to buy more, but also introduce them to products they might not have thought of purchasing, or realized they even needed (or wanted). AI can also introduce shoppers to businesses that weren’t previously on their radars. AI has the potential to offer an overall better, faster, more efficient, and pleasurable shopping experience.

After the data is collected and analyzed, the goal is to predict future behaviour, make tailored recommendations, increase sales, and more strategically reach individual customers.

Customers may be wary of companies that collect so much data and use AI to offer an improved and personalized experience, even if it is anonymous. But the value in getting special offers for items you frequently buy and search for, or receiving a notification when your favorite clothing shop has a new item that fits perfectly with your personal style, is hard to ignore.

The predictive nature of AI means that sometimes businesses might very well know what we want or need before even we do and they’re able to pinpoint where you are on that customer journey. And that, my friends, is good customer service.

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It is our mission to explore the implications of emerging technologies, seeking answers to next-level questions about how they will affect society, business, politics and the environment of tomorrow.

We aim to inform and inspire through thoughtful research, responsible reporting, and clear, unbiased writing, and to create a platform for a diverse group of innovators to bring multiple perspectives.

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