As retailers look to enhance operational efficiency and boost customer satisfaction, generative AI offers several benefits. From simple process automation to cognitive automation, IT operations automation, customer contact center automation, and more – AI helps drive faster speed-to-market and optimized operations.

AI in retail is projected to grow from $31.12 billion in 2024 to $164.74 billion by 2030. Let’s discover how retailers can use AI-led automation.

AI Automation Applications in Retail

Retailers can transform daily operations and efficiency with AI. From streamlining inventory management to taking customer experience to the next level, let’s look at the top ways in which retailers can leverage the latest in GenAI and agentic AI tools and systems:

1. Inventory optimization: AI-led automation can help dramatically optimize inventory. AI algorithms can constantly analyze market demand and other external factors to align stock with buying trends. This reduces the chances of excess inventory and stockouts, eliminates waste, optimizes space, and enhances profitability.

Retail giant Amazon uses deep learning and AI to determine which products to stock in which quantities at which Amazon facility. This allows the retailer to efficiently coordinate inventory shipments from millions of sellers worldwide – well before a customer clicks to purchase their item.

2. Demand forecasting: Outdoing competition in today’s retail world requires companies to know what customers want before others do. Agentic AI-enabled systems can study past sales data, current market conditions, and emerging trends to accurately predict demand. Such precision minimizes overproduction, reducing waste while improving customer satisfaction. Since AI models learn with time, they can take factors like demand changes, production capacities, and resource availability into account to minimize bottlenecks and optimize production efficiency.​

Fashion chain Zara leverages generative AI to forecast demand. This enables the brand to quickly design and present collections that reflect current customer tastes. AI tools constantly scan social media behavior, customer reviews, and the latest trends, detecting popular colors, patterns, and styles.

3. Content creation: Agentic AI systems can help retailers automate and optimize product descriptions and campaign creation. Companies can use AI tools to create appealing product images and advertising content and enhance conversion rates – without much effort.

Beauty and wellness company Nykaa leverages generative and agentic AI systems to automate catalog management and enhance product discoverability. The company also uses AI to automate product attribute identification and description, ensuring consistency and optimizing SEO.

4. Personalization: In a highly competitive retail landscape, AI allows for a high degree of personalization and customization. Using AI and automation, retailers can deep dive into customer behaviors and preferences and enable memorable shopping experiences. By data points such as browsing habits and purchase history, retailers can optimize product placement, tailor campaigns, and enable personalized shopping experiences that drive engagement and loyalty.

Indian department store chain Shoppers Stop uses AI-driven recommendation engines to enable favorable shopping experiences. By analyzing purchase history and browsing behavior, these engines offer personalized product suggestions, promotions, and content, significantly enhancing customer satisfaction and increasing sales conversion rates.

5. Customer service: Artificial intelligence offers exceptional benefits in the world of customer service. For retailers operating e-stories, AI-enabled chatbots and virtual assistants work around the clock to offer much-needed assistance to customer queries. From problems in orders to the inability to find the right products, agentic AI helps solve issues, thereby improving customer experience, satisfaction, and loyalty.

Multinational retail corporation Walmart leverages AI in its customer service operations to resolve issues quickly and easily. Natural language understanding algorithms assist customers with simple questions about the status of an order, returns, and more, enabling agents to focus on assisting customers with more complex queries. 

6. Risk management: Agentic AI tools also enable efficient risk management, enabling retailers to take proactive steps. From navigating supply chain disruptions to handling market fluctuations, AI’s predictive analytics capabilities enhance decision-making. This helps retailers maintain their competitive position and customer satisfaction while minimizing the costs of non-compliance.

Fashion retailer Myntra leverages AI algorithms to detect fraudulent behavior on its website. Through continuous analysis of transaction patterns, user behavior, and payment data, these algorithms help identify fraudulent activity and minimize the risk of fraud or hacking. This helps build customer trust and credibility

A Real-world Use Case

A retailer with operations across North America was looking to improve the quality of its customer service. The client’s existing contact center was inefficient in handling high call volumes. Siloed tools made data collection time-consuming, resulting in higher customer wait times.

To eliminate manual effort and costs, reduce errors, and improve overall customer satisfaction, the retailer sought an automation solution that leveraged AI and RPA to transform service quality. By enabling seamless automation and integration, Recode Solutions set up a system where agents could respond to customers’ responses in real time and take action.

The agentic AI-led automation solution helped the retailer efficiently handle >80,000 requests, reduce annual costs by $650,000, and cut down wait times by ~50%. Cutting down wait time has resulted in savings of 36,000 person-hours annually, $1 million savings by reducing headcount, and cutting down time to onboard new agents by 90%.

AI for the Future

AI-driven solutions are transforming retail operations like never before. From inventory management to customer support, AI-led automation is making them more efficient and cost-effective. Predictive analytics and natural language processing capabilities are enabling retailers to forecast demand accurately, personalize experiences, and optimize stock levels.

Agentic AI systems also help detect inefficiencies and risks in the supply chain, enabling businesses to adjust operations in real-time, reducing waste, and improving overall efficiency. However, many organizations face challenges in establishing and scaling their GenAI projects.

At Recode, we offer a range of advanced AI solutions and digital workers to carry out complex tasks with unmatched efficiency and accuracy. Right from customer support to content creation, these digital workers can revolutionize retail workflows and enhance productivity. Contact us today to strategize, build, scale, and sustain your AI initiative and enable true efficiencies across your retail enterprise.