6 ways to use generative AI to increase retail profits
According to McKinsey’s latest report on generative AI, the productivity impact of generative AI could contribute trillions of dollars to the global economy. The retail and consumer products sector can also generate approximately $400 billion to $  660 billion in annual revenue.
According to Accenture’s 2023 Technology Vision, 96% of retail industry executives are very excited about the potential of the “foundation model” to power AI applications like ChatGPT. More than 90% of them believe these models are essential to their retail strategy over the next 3-5 years. Additionally, more than half are using generative AI in sectors such as customer support and process automation.
In this article, we introduce six ways to use generative AI to improve productivity and profitability in retail.
table of contents
- Create a personalized shopping path
- Inventory and supply chain monitoring
- Edit product description and images
- Price monitoring and optimization
- Creating a chatbot for customer service
- Fraud detection
- The success story of generative AI implementation at a major retailer
- â‘ eBay
- â‘¡Shopify
- For those looking for a technology partner to promote AI technology
Create a personalized shopping pathÂ
Modern consumers expect highly personalized content and offers when visiting their favorite brands’ websites and apps. This has made it imperative for brands to invest in tools that allow them to offer their customers a highly personal shopping experience.Â
Generative AI reviews customer data and recommends products tailored to each consumer. Design custom shopping paths, offer discounts based on past purchases, and create content that aligns with their tastes. This approach leads to increased sales for retailers.Â
Inventory and supply chain monitoringÂ
Recent challenges in retail, such as pandemic-induced shipping restrictions, delivery delays, and miscalculated inventory orders, are disrupting supply chains and inventory management.Â
Generative AI provides a solution by analyzing sales data and providing recommendations for inventory management. Additionally, AI uses historical data, customer feedback, and market competition to predict future trends. This allows retailers to make wise order selections, improve supply chain efficiency, and ensure timely delivery.Â
Edit product description and imagesÂ
Success in the vast digital marketplace is about more than great products and popular brands. Your product description page (PDP) needs to stand out with clear information, high-quality images, and SEO-optimized content.Â
Generative AI can be used to instantly create or improve product page descriptions with less human intervention. You can use this to improve the ranking of your product listings, add SEO keywords to support rankings in SERPs, create or optimize images for PDP, and deliver customized product descriptions to consumers. It is.Â
Price monitoring and optimization
Today’s shoppers are more price-sensitive than ever before due to economic concerns like inflation and recession. According to a recent study by Intelligence Node, approximately 95% of shoppers compare online prices for similar products when shopping in-store. This trend shows that consumers are constantly looking for the best price before making a purchasing decision.Â
To stay competitive, brands need to monitor competitive prices and react quickly. AI can assist retailers by quickly evaluating competitive prices, gauging market demand, and detecting industry trends to set optimal prices.Â
Creating a chatbot for customer serviceÂ
Generative AI can be used to create chatbots to assist customers with questions and troubleshoot issues. This allows retailers to provide better customer service to consumers and reduce the workload of human customer service representatives. Effective customer service also helps improve customer satisfaction and increase brand loyalty.Â
Fraud detectionÂ
Generated AI algorithms can detect and prevent fraudulent activities such as fake purchases and returns, saving retailers money and improving customer trust. Through a series of algorithmic steps, it can also identify counterfeit products and unauthorized sellers on the marketplace, helping brands protect their brand identity and profits.Â
The success story of generative AI implementation at a major retailerÂ
â‘ eBayÂ
eBay is cleverly using generative AI in the retail industry. eBay ShopBot acts as a personal shopping assistant, helping customers find the most attractive deals through eBay’s extensive array of over 1 billion listings. Customers can interact with ShopBot by text, voice, or by sharing a photo showing what they’re searching for. The bot initiates further conversations to better understand the user’s requirements, which allows it to provide tailored recommendations.Â
â‘¡ShopifyÂ
Shopify is another company implementing generative AI in its retail solutions. Shopify Magic employs automatic text generation to automate the content creation process. It leverages artificial intelligence to retrieve information and generate suggestions for different content types. This includes product descriptions, email subjects, and online store headers.Â
For those looking for a technology partner to promote AI technologyÂ
CMC Japan is the Japanese subsidiary of CMC Group, Vietnam’s second-largest ICT group. We support our customers’ projects with the technical capabilities and know-how that the CMC Group has cultivated over 30 years.  Â
We have a deep understanding of Japan’s evolving retail industry and our team of bilingual account managers look forward to supporting your retail business plans.Â
