By Nikki Hallgrimsdottir

With consumers expecting premium levels of service at the press of a button, it’s vital that businesses in the retail industry are at the cutting edge of technology. Expectations are higher, and competition is fiercer than ever, and as such, innovation and industry disruptions are more necessity than a luxury.

It then comes as no surprise that retail businesses are projected to spend $7.3 billion on AI by 2022 — with the majority of that money dedicated to transforming the customer experience.

Through the strategic and nuanced implementation of AI, retailers will offer customers a more personalized, intuitive, and convenient experience, leading to enhanced levels of brand trust.

Such a dramatic technological shift in the industry is evidenced by leading retailers — such as Amazon, Dominos Pizza, and Walmart — making AI a significant facet of their business model.

Improved Delivery Logistics

Since Amazon is a leader in almost every aspect of retail and eCommerce, it’s no surprise that it’s breaking some serious ground with AI.

Amazon’s thirst for AI innovation is no more evident than when in July 2016, it partnered with the UK government in developing drones to make small parcel deliveries. Currently, the eCommerce giant is working with regulatory agencies towards implementing the technology.

Known as ‘Prime Air,’ Amazon’s drone delivery service is a future delivery system dedicated to the safe transportation and delivery of packages up to 5 pounds in less than 30 minutes.

In December 2016, the first 13-minute unmanned flight of a drone was launched. At this point, Amazon steadfastly aims to determine optimal safety and reliability parameters ASAP. While there are no projections for commercial use, there’s plenty of collaboration with regulators in a multitude of countries.

If all goes according to plan, it seems entirely plausible that within the next decade, instantaneous AI air deliveries to customers will be a reality.


Another way the retail industry is leveraging AI is its use of chatbots — which offer customers the convenience of their own personal shopper at no additional fee.

For instance, Walmart’s “Hoo the Owl” asks questions to future parents registered online. The chatbot finds out the baby’s due date, gender, and nursery theme then customizes suggestions depending on the answers. Walmart intends to enhance the levels of personalization by adding more questions about organic and sustainable products.

The shopping experience is brought directly to Walmart’s customers with its savvy implementation of AI technologies. Instead of customers aimlessly searching for ideal products, Walmart’s chatbots ensures that the best choices fall directly into their laps.

Cosmetic industry juggernaut Sephora applies the same principles with chatbots, offering each customer ideas on new makeup looks. Sephora’s chatbot is an in-store tool too, providing product recommendations, reviews, and ratings during a visit to any one of their stores.

Improved Customer Communication

Beyond personalization, AI also lets customers contact businesses no matter the place or time. Without AI, there is a litany of factors preventing customers from getting in touch with reps. In most cases, the phone lines are too busy, or it’s no longer operating hours.

While chatbots can’t adequately respond to every customer query and complaint, they filter through the simple issues, allowing the human agents to focus their energies on more challenging circumstances.

What’s more, is these bots are highly adaptable, handling increasingly more difficult complaints. Then, once a situation exceeds a chatbot’s capabilities, it directs the issue to a live rep.

Immediate access to these chatbots increases both customer satisfaction and productivity while decreasing the operational costs of customer service.

Domino’s Dom the Pizza Bot provides immediate responses to customers with hilarious and engaging content. Dom also gives customers the choice of fully automated ordering experience, or they can talk to a live agent.

It’s this kind of savvy thinking that led to Dominos knocking Pizza Hut off its throne of ‘largest pizza company in the world’ at the beginning of 2018, after generating an astonishing $12.3 billion in global revenue.

It behooves retail companies to see that the future is now. The quicker they start utilizing AI, the more they’ll remain at the head of the pack.


How Artificial Intelligence is Changing the Customer Service Experience Forever. (2018, September 18). From TechGenix

AI Can Comb Through Your Data to Create More Compelling Customer Experiences. (2017, June 14). From Harvard Business Review

11 AI Use cases in Customer Service in 2019: In-depth Guide. (2019, January 4). From AI Multiple

3 Use Cases Of Artificial Intelligence For Customer Experience. (2018, August 1). From Forbes

How AI Can Transform the Retail Customer Experience. (2019, February 26). From TotalRetail

Artificial Intelligence in Retail — 10 Present and Future Use Cases. (2019, March 28)

Nikki Hallgrimsdottir is a co-founder of and AlgoFace where she helps enterprises leverage Artificial Intelligence, Augmented Reality, and Data Analytics to transform their business. Nikki believes that the way we work, shop and play is changing, and pairing Human and Machine Intelligence in a responsible way can create a better future for all of us. Nikki and her family recently relocated to Seattle after spending 10 years in the San Francisco Bay Area.