5 ways Generative AI is impacting retail

Generative AI isn’t just entering the business world, it is completely transforming it by automating a wide range of tasks and opening new opportunities for products and services – and that now includes retail.

Here are five of the main ways.

Increased personalization

Probably the biggest impact Generative AI is having on the retail space is when it comes to personalization. Today’s shoppers expect highly individual and engaging content from their brands of choice – especially the younger generations. Generative AI can boost personalization by analyzing customer data to generate appealing product recommendations and offers. It can also curate customer journeys, offering discounts based on historical data and creating content that resonates. This helps retailers increase sales and get that all-important customer loyalty.

Supply chain

The thorny issue of supply chain is starting to be assisted by Generative AI. Retailers can now use machine learning to analyse historical data and predict product availability and delivery times. They can then incorporate real-time data (such as weather and traffic) to refine the predictions and combine customer order data to optimise route planning for delivery.

Visual searches

Generative AI can enable visual search which means allowing consumers to upload images of products they are interested in and finding similar products in the retailer's inventory. Not only can this help retailers improve the customer experience by providing an easy way for them to find what they want, it also helps brands gather valuable trends data on what shoppers are most interested in right now.

Virtual try-ons

Additionally, virtual try-on technologies use Gen AI to simulate how products like clothing, accessories, and cosmetics would look on a customer before they make a purchase. This is becoming extremely popular with younger social media savvy shoppers, notably Gen Z.

Inventory management / fraud detection

Generative AI can also optimise inventory management by predicting demand and streamlining supply chain logistics. This helps retailers reduce costs by minimising stockouts and overstocking. Running parallel to this, AI algorithms can analyse transaction data to detect fraudulent activity and prevent chargebacks. This can help retailers reduce losses due to fraud and protect customer data.