Most people think of artificial intelligence (AI) as advanced gaming characters or Hollywood A.I. like the voice of Siri in the iPhone. However, AI is becoming increasingly prevalent in our everyday lives whether we know it or not. Financial institutions are using AI for fraud detection, retail companies are using it for customer service and product recommendations, and healthcare organizations are beginning to use AI for clinical decision support and even surgery assistance.
Financial institutions are using AI for fraud detection, retail companies are using it for customer service and product recommendations, and healthcare organizations are beginning to use AI for clinical decision support and even surgery assistance.
The potential uses for artificial intelligence (AI) are only limited by our imagination. So far, AI has been put to use in a number of different industries including finance, retail, and healthcare. In the financial sector, AI is being used for fraud detection. Retail companies are using it for customer service and product recommendations. Healthcare organizations are beginning to use AI for clinical decision support and even surgery assistance. The possibilities are endless and the potential benefits tremendous.
AI in the market of Serbia
Looking at the Internet in Serbia, as well as social networks, it is obvious that various AI tools have become familiar. There is no woman who has not tried an AI tool that would show her how realistic her age is 🙂 or how she would look with a different hair color. The IV Industrial Revolution entered Serbia through the back door. However, in order to provide a theoretical framework, especially in the situation of a continuous crisis caused by a global pandemic, we turned to sources outside the Republic, and in that sense we peeked into the considerations of the authors from the Harward Business Review and Science Direct.
While the former focus on explaining which AI tools are used in marketing today, the latter go behind the curtain of the global pandemic and the use of AI in retail.
AI and Marketing
According to the authors of “How to Design an AI Marketing Strategy“, artificial intelligence used in marketing can be categorized according to two dimensions: the level of intelligence and whether it is independent or part of a broader platform. Task automation. Simpler chatbots, such as those available through Facebook Messenger and other social media providers, fall into this category. Machine learning. These algorithms are trained using large amounts of data to make relatively complex predictions and decisions. Such models can recognize images, decipher text, segment users, and predict how customers will respond to various initiatives, such as promotions. Machine learning is already driving software shopping in online advertising, e-commerce referral mechanisms, and sales propensity models in customer relationship management (CRM) systems. Standalone applications. Standalone applications are said to require customers or employees to make outside of these channels in order to use AI. Using IBM Watson’s natural language processing and tone analyzer capabilities (which detect emotions in the text), the app delivers several personalized Behr color recommendations based on the mood consumers want for their space. Integrated applications. For example, machine learning that makes a fraction of a second of deciding which digital ads to offer users is built into platforms that manage the entire process of buying and placing ads. Netflix’s integrated machine learning has been offering users video recommendations for more than a decade; his choices simply appear in the menu of offers that viewers see when they visit the website. If the mechanisms for recommendations were independent, they would have to go to a dedicated application and ask for suggestions.
AI and Retail
Dhruv Grewal, Dinesh K. Gauri, Anne L. Roggeveen, Raj Sethuraman in the text: “Strategizing Retailing in the New Technology Era” claim that even before the global pandemic, retail changed dramatically with new technologies, and that the global pandemic only accelerated the use, and that the established patterns of use are likely to persist after the end of the crisis caused by the global pandemic. They also highlight concerns about security and privacy among customers interacting with retail AI technologies. They further question how each of the different technological solutions in the store (e.g. smart mirrors, robots) works on consumer behavior when shopping. The text from Forbes brings more about smart mirrors, it may be interesting.
You can see the use of Lulule mon Mirror fitness mirrors. What else has the global pandemic brought? It brought an intertwining of old and new industries, moving from one to other sales channels and vice versa. Thus, as the authors claim, the sellers of bricks and mortars moved to the net channels, while on the other hand, the gig players moved to the spaces of bricks and mortars. There is further talk about the positioning of private labels (private label) in relation to national brands and the introduction of “smart private labels”. As always, the wider range, which we are introducing in order to interest and maintain the level of interest of customers, brings with it higher costs of maintaining stocks, but on the other hand, a larger visit and the size of the basket. The authors recommend that traders must be diligent in removing unexciting and less relevant SKUs. Advances in data and analytics play an important role in managing this fine balance between creating excitement with more and more SKUs and keeping costs under control.
The primary global pandemic (beginning of the pandemic in 2020) has encouraged consumers to focus more on basic things and give up luxury products. In addition, we are used to buying from an armchair. What the authors ask is crucial: does the lack of social interactions and communication with technology and robots affect preferences when it comes to brands? The text was published on the portal in March 2021. Today, when we operate under weaker measures of alienation, the question can be supplemented: have consumers maintained the preferences adopted by the rapid transition to the Internet environment (due to the global pandemic) or are they adopting other models of purchasing decisions influenced by brand ambassadors and influencers? These questions will be asked until everyone finds their place on the Internet. It is clear that there is a synergy of traditional retail and online shopping behaviors and mutual adoption of behavioral models, which is not clear to what extent traditional retail outlets will change due to the impact of e-shopping culture. What is obvious, and the authors themselves emphasize, is that retailers are increasingly turning to temporary workers (part-time), especially when they add new services (e.g. pick-up on the street, home delivery), or outsource service. (e.g. DoorDash, Instacart) to limit their reliance on full-time employees and associated costs.
Regarding pricing policy, the authors emphasize the importance of virtual models, where the retailer can strategically decide how to display prices to that customer (e.g., individually or in a package). You can look at a web application (framevr.io) that does not require a download and what it brings. It is free for up to 15 users and very interesting.
The authors further wonder how, in the conditions of new business, reliance on utilitarian and / or hedonistic philosophical views will affect effectiveness of promotional and communication strategies? Will marketing experts think exclusively about satisfaction, even if it does not contribute to any other benefit, or will they also think about the correctness of actions based on their consequences? Changes conditioned by the use of new technologies must be brought into ethical harmony with the profitability of promotional strategies. We believe that in the coming period there will be more words on this topic, as well as that it will be the subject of detailed regulation.
The authors conclude with four main tactics used by retailers, and we list them here: (1) creating themes (eg Nordstrom portrayed a rock, which consumers consider artistic and colorful), (2) reflects the story of the brand e.g., Chanel integrates lighting, music, and decor to help consumers visualize the brand story), (3) entertaining customers with toy elements (e.g., the Ahlens children’s storefront includes rubber climbing ducks), and (4) highlighting brand exclusivity (e.g. .Nordstrom’s minimalist mannequins depicting goods).
- Strategizing Retailing in the New Technology Era, Dhruv Grewal, Dinesh K. Gauri b, Anne L. Roggeveen a, Raj Sethuraman
- How to Design an AI Marketing Strategy, Thomas H. Davenport, Abhijit Guha, Dhruv Grewal