Enduring AI-Powered Retail Trends for 2022

The resiliency of the retail market cannot be overstated. Even before the COVID-19 pandemic, the retail industry had undergone significant change in the past decade, highlighted by the shift from in-store to online shopping and digital engagement. Digital customer care rapidly expanded with new channels on the web, mobile apps, and social media; older channels, such as chat and interactive voice response (IVR), were refreshed with new technologies, particularly in the realm of artificial intelligence (AI) and speech technologies.

Older consumers and digital natives alike have flocked to digital retail for the convenience and breadth of products and services that e-commerce and mobile commerce offer. Mobile app creation rapidly accelerated to improve ordering and tracking, enhance the in-store and online experience, and provide location-based services and more accessible proactive and interactive customer service.

With the change in consumer behavior, the retail market pre-COVID was already beleaguered with a steep decline in large retail chains and a subsequent uptick in bankruptcies. Where people shopped in person also changed, with North American malls suffering in popularity. Real estate analytics firm Green Street noted that 750 of the 1,000 malls it tracked in 2021 had empty anchor stores (large chains, such as Nordstrom’s). COVID-19 further accelerated these changes with lockdowns, social distancing, economic distress, labor shortages, and supply chain issues, forcing many more consumers to go online.

Moving Forward in 2022 and Beyond

Grocers and retailers alike are looking for new ways to provide convenience and contactless delivery. In addition to continued increases in curbside pickup and buy online, pick up in store (BOPSIS), newer technology-enhanced options, such as click-and-collect storage lockers, are being deployed for added convenience, quicker pickup, and reduced labor costs.

Businesses are piloting new ways to create experiential retail to draw customers back into stores, emotionally connect with them, and open up new markets. Numerous retailers are creating concept stores or shop-in-shop (a shop of one retailer within the larger store of another, such as Toys R Us in Macy’s), often tinged with digital omnichannel customer care. More intelligent and engaging mobile applications are crafting new in-store experiences, helping customers with product information, special offers, and purchasing assistance, with easy access to in-store assistance as well as customer service agents for more detailed service.

Infused throughout are technologies under the umbrella of AI, enabling these developments:

• Replacing old IVRs with intelligent virtual assistants (IVAs) and bots to speed service delivery, make suggestions, and personalize services.
• Adding smart carts and contactless in-store checkout.
• Using tone analysis and sentiment detection to surface data for use in self-service applications and subsequent live agent interactions when necessary.
• Using AI, augmented reality, and gesture recognition in smart mirrors to enable shoppers to virtually try on new clothing and makeup looks.

Beyond the in-store and online experience, AI-infused capabilities are supercharging customer care as well. AI technologies are rapidly being adopted and enhanced across the contact center, with the vast majority of solution providers staffing R&D groups with speech scientists and other AI specialists to develop core AI functionalities and new capabilities on top of other AI technology providers’ solutions. No area has gone without embellishment.

AI and machine learning are used to bring awareness of consumer preferences, propensity to buy, and other purchasing factors. For example, as part of the IBM Watson Personality Insights Service, IBM has grouped more than 50 consumer purchasing preferences into eight categories to help businesses design more personalized and targeted campaigns and assist with upselling and cross-selling, bridging customer support and marketing.

Robotic process automation used in the back end has now solidly infiltrated the contact center, both for automating tasks and through personal digital assistants that lend a hand to live agents. AI-powered solutions are used to improve performance by creating actionable intelligence on customer interactions and surfacing the right information at the right time to assist customers in self-service and agents to assist them. These technologies are enhancing forecasting and scheduling packages and quality management solutions, along with analytics that help continuously improve interaction handling. Yet we have only just begun. In 2022 and beyond, the use of AI and speech technologies are now on the fast track to improve retail customer engagement. 

Nancy Jamison is an industry director in information and communications technologies at Frost & Sullivan. She can be reached at nancy.jamison@frost.com, or follow her on Twitter @NancyJami.