Physical stores today are still a popular choice for many shoppers. Despite the rise of e-commerce, offline retail dominates with an expected 80% market share in 2023. However, consumers have changed and want more, the study shows.  

People appreciate the traditional benefits of physical retail, like friendly sales associates and fun in-store events. But they also look for the tech features they find online, such as plenty of product insights, easy search, and fast checkouts.  

Now, brick-and-mortar stores are not just competing with each other but also racing against e-commerce. And to stay in the race, you must be open to adopting new technologies like artificial intelligence.  

The article shares amazing examples of how AI-powered solutions help offline retailers address consumer pain points and gain a competitive advantage on the market. 

This article is a part of the “AI in retail” series, where we showcase all aspects of AI implementation for small and mid-sized businesses. Read more materials from this series: 

AI in Retail for Seamless Omnichannel Experience: CHI Software Case 

Being active online is no longer just an option, it is a necessity. 99% of shoppers start their buying journey online – compare prices, look through reviews, check in-store availability, and hunt for the best deals. People want to get shopping insights before entering a store.  

Recognizing this trend, our client, a multinational company, one of the top five beauty retailers in the US, approached our team. The company has a vast chain of stores nationwide and an established web platform. So, their vision was to forge an AI-powered solution that seamlessly blended online experience with in-store shopping and delivered a unified customer journey. 

Step by step, our team has developed a complex mobile app incorporating innovative functions: 

  • Virtual makeup fitting room: This revolutionary AR/VR-enhanced feature allows users to try on makeup items like lipsticks, eyeshadows, and foundations. People can immediately see a virtual makeover on their digital self by selecting various products and shades; 

AI for physical retail | CHI Software use case

  • Personalized recommendation system: With the help of advanced algorithms, the app analyzes a user’s face and style on a photo and suggests makeup products and colors; 
  • Makeup trend analysis tool follows the latest beauty trends in social media and keeps users updated; 
  • Surveys and rewards: Customers can participate in surveys tailored to their beauty interests and get exclusive offers and discounts; 
  • An interactive chatbot powered by the GPT model communicates app recommendations, consults about orders and discounts, or helps find the nearest store location. 
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As a result, we delivered a cutting-edge mobile app that shoppers love to use for experimenting and, of course, shopping.  

The solution also arms in-store sales assistants with data-driven insights for their beauty recommendations and minimizes the costs of in-store makeup testers. 

AI in Offline Retail: 5 More Remarkable Use Cases to Keep in Mind 

Intelligent tech is changing how traditional shops work. AI can make shopping cooler for customers with solutions like robot helpers or automated checkouts. Behind the scenes, algorithms help retailers better forecast prices and understand what shoppers want. Here are more exciting examples of how AI helps in offline retail. 

In-Store VR/AR   

AI-enhanced VR and AR tools can let you experience products that are not physically real. Moreover, AR also helps when there are too many products to choose from. 

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For example, Walmart is testing an AI feature that works as a shelf filter. Shoppers can use their phones to see only products they are interested in. So, finding lactose-free yogurt on the shelf becomes much easier.  

AI for Easy Checkouts 

Shopping is fun, but no one likes waiting to check out. 39% of in-store shoppers confess they hate standing in long lines. That is why retailers are bringing in algorithms to make the payment process in brick-and-mortar stores as fast and easy as in e-commerce. 

For instance, visitors at Sam’s Club can use their phones to scan the barcodes of items while they shop. When done, they pay in the app and show a digital receipt on their phone to an employee at the exit. This makes checkout very quick, only taking a few seconds. 

Mood Tracking Solutions

Retailers experiment with AI-infused mood-tracking solutions, or emotion AI, to understand how shoppers feel about their stores and items sold. Through small cameras and sensors, systems can notice people’s reactions to products, prices, packages, or aisle arrangements. The innovative software analyzes customers’ moves, eye movements, and facial expressions.

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AI Solutions for Price Management

Retailers can use AI to decide the best prices. Machine learning algorithms make recommendations based on past sales, promotions, and seasonality. AI tools also consider external factors like market changes and competitors’ actions to suggest optimal prices for current business goals.

For instance,  Apotek Hjärtat, the largest pharmaceutical chain in Sweden, is using algorithms to offer its audience the best prices and sales deals. This way, the retailer plans to outdo competitors, maximize promotional effects, and grow its market share.

In-Store Robotics

Robot helpers are common for many in-store jobs, making work faster and easier. They can perform routine operations like cleaning floors, checking how goods are displayed in stores, helping to find items, and moving big boxes in warehouses.

BJ’s wholesale robot

An excellent example is Tally, the BJ’s Wholesale Club robot. Tally uses a special camera to check the shelves regularly, ensuring products are in stock and correctly priced and displayed. So, the automated co-pilot successfully saves a lot of precious time and effort of its human colleagues.

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Conclusion

Brick-and-mortar stores remain a favorite place to shop for many people, whether for a leisurely weekend outing or a quick stop at the local store. Yet modern shoppers are craving more – better prices, quicker checkouts, and deeper personalization.

The good news is that AI technology is here to help. It is changing the game by improving everything from demand planning to customer service and addressing even the toughest issues. Now is the best time to use the power of AI before your competitors do the same.

If this sounds exciting, but you need help figuring out where to start, consulting an industry expert is a smart move. 

The team of experienced AI/ML enthusiasts at CHI Software is ready to support you on this journey. We are here to help you navigate the AI landscape and find the best solution. Let us work together to start a new chapter of your business success!

About the author
Alex Shatalov Data Scientist & ML Engineer

Alex is a Data Scientist & ML Engineer with an NLP specialization. He is passionate about AI-related technologies, fond of science, and participated in many international scientific conferences.

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