Retailing is the heart of every economy around the world. But perhaps you haven’t heard of the Economic Big Bang yet. It’s the sound that a few sophisticated retailers heard back in 2022. You might think this is just another article about AI and the Economy stinking. It’s not. This is a hardcore view AI-Commerce and how few are ready for this.
If you were a retailer at the beginning of 2022, you would have been there as we began to exit the pandemic. It was, and its impact continues to brutalize the world economy. I am not to join the bandwagon of conspiracy or blame because it is a dead end, and these sophisticated retailers didn’t either. If you want to believe that things will be normal once interest rates start to come down, you would be wrong. These retailers have been warning us about it for some time. Even if you began to lower rates by a quarter percent every few months, Central Banks globally need to get to 3.0%, which will take a couple of years, and consumers are strapped in and intent on protecting their homes and livelihoods.
So, what should a sophisticated retailer do? The answer is to transform your business and consumer models into the next-generation company. Don’t wait as others did with the internet, ecommerce, social and digital marketing. No one can afford that. So, while everyone was still pursuing the future of retail with ideas and strategies of the past, these retailers moved on.
In the rapidly evolving world of retail, one truth has become increasingly evident: traditional concepts like omnichannel and unified retail are no longer the frontrunners in the race for consumer engagement. Instead, the spotlight has shifted to a new paradigm—AI-Commerce. This transformative approach is not just a buzzword; it’s a fundamental shift in how retailers interact with their customers, manage their operations, and drive growth. If you need more convincing, read the rest below.
I don’t believe companies like Nike, Hugo Boss, and Burberry, who have been in the news lately, among others, heard the Economic Big Bang and, like many, are unprepared.
With that big bang, AI has been behind the technological shift. If you are a retailer or any industry and don’t see this, you are on an island with approximately 30% of other businesses and leaders who are in denial or oblivious. Seventy percent see the shift, but they are divided. One knows what they need to change, another knows but can’t afford it, and the last doesn’t know where to begin. By 2025, anyone still chasing the future with outdated strategies and technology will be swiftly challenged.
AI-Commerce leverages the power of artificial intelligence to create highly personalized and efficient shopping experiences. Unlike omnichannel retail, which focuses on providing a seamless experience across various platforms, AI-Commerce goes a step further by integrating AI at every touchpoint of the customer journey. This integration enables retailers to anticipate needs, personalize interactions, and optimize operations in ways that were previously unimaginable.
One of the most significant advantages of AI-Commerce is its ability to deliver personalization at scale. AI algorithms analyze vast amounts of data to understand consumer behavior, preferences, and purchasing patterns. This insight allows retailers to tailor each shopper’s recommendations, offers, and content. For example, AI can predict what a customer will likely purchase next based on their browsing history and previous purchases, offering intuitive and timely suggestions.
AI-powered chatbots and virtual assistants are revolutionizing customer service. These intelligent systems can handle a wide range of inquiries, from product information to order tracking, providing instant responses that enhance the customer experience. Moreover, they learn from each interaction, continually improving their accuracy and efficiency. This not only improves customer satisfaction but also frees up human agents to focus on more complex issues, enhancing overall service quality.
AI-Commerce isn’t just about front-end customer interactions; it also significantly impacts back-end operations. AI-driven inventory management systems can accurately predict demand, reducing overstock and stockouts. By analyzing trends and patterns, AI helps retailers optimize their supply chains, ensuring that products are available where and when they are needed. This efficiency translates into cost savings and improved profitability.
Dynamic pricing, powered by AI, allows retailers to adjust prices in real time based on various factors such as demand, competition, and market conditions. This flexibility helps maximize revenue and stay competitive in a fast-paced market. By continuously analyzing data, AI can determine the optimal price point for each product, balancing profitability and customer satisfaction
While e-commerce continues to grow, physical stores are not becoming obsolete but evolving. AI-Commerce is transforming brick-and-mortar locations into smart stores. In these environments, AI technologies such as facial recognition and sensor-based systems track customer movements and preferences, providing valuable data that can enhance in-store experiences. Interactive displays and personalized promotions make shopping more engaging and relevant.
AI-Commerce is not just the next step in retail evolution; it is a complete transformation and perhaps a revolution of the industry. I am not going to tell you to harness the AI revolution. That is something every human and business owner/leader needs to come to terms with on their own. I will close this off by repeating, “Don’t get caught chasing the future with outdated strategies and technology.”
CEO | MBA | Author | Advisor | Speaker | Business Visionary
George Minakakis is a Thought Leader and Keynote Speaker. His experience leading, developing, and reviving global brands make him a sought-after Executive Advisor.
