It’s no secret that the retail landscape has been changing and evolving, especially over the past decade.  With the rise of online shopping, quick delivery a la Amazon Prime, and brands utilizing social media for organic marketing, consumers are living in an on-demand world and are able to find content and shop in ways like never before.

As younger generations begin to gain more spending power, brands and retailers are learning how to better interact with shoppers.  These consumers are savvy – they’ve grown up with technology and know what they want and want it fast. They also are looking for more interactive experiences. As brick-and-mortar stores struggle to attract and maintain shoppers in this digital world, some well-known retailers are turning to new technologies like Artificial Intelligence and Augmented Reality to appeal to consumers, while creating an exciting and engaging shopping experience.

What is Artificial Intelligence & Augmented Reality?

Artificial intelligence (AI) and augmented reality (AR) each sound like something out of the movies, but these technologies are becoming tools that the retail sector can use to blur the lines between online and in-store shopping experiences.  

Let’s first define both AI and AR: Artificial Intelligence refers to the simulation of intelligent behavior such as visual perception, speech recognition and decision-making, while Augmented Reality refers to an interactive experience that combines the real-world environment with a virtual, computer-generated world.

There are many ways that companies can—and have—been integrating these technologies into their daily operations, from preparing packages in warehouses or distribution centers, gathering data and analytics to see what products are most popular to meet customer demands, and minimizing theft through software at self-checkout kiosks.

Shifting the Customer Experience

Beyond the logistics and operations side of retail, AI and AR are both having a large impact on the customer shopping experience through personalization.  For example, from a marketing standpoint a customer may be able to see different versions of a company’s site based on past interactions, receive coupons specifically for items they’ve purchased the most or even see improved and more personalized product recommendations all thanks to artificial intelligence.  

Also think about subscription boxes that have become popular in recent years like StitchFix or BirchBox.  These services have provided customers with curated and personalized experiences by allowing them to provide feedback and take styles quizzes online which translates to more tailored items that are hand-picked and delivered right to their doorsteps. Further, artificial intelligence has been assisting in the customer experience through customer service and engagement with Chatbots.  

Augmented Reality is a bit more front-and-center from the consumer perspective, which will continue to increase over the next decade. Many retailers are looking into offering customers smart mirrors in dressing rooms. Neiman Marcus was on of the first stores to offer these mirrors in select locations, creating a virtual dressing room that allowed shoppers to try on multiple outfits in a fraction of the time it would take to physically try the items on.

Also, think about stores like Sephora that have been working to transform the retail experience by providing technologies that allow consumers to sample fragrances with touchscreens and scented air, using augmented reality to try on different shades of makeup and using artificial intelligence to match their skin tone with the right foundation.

Bottom Line

All of these developments in AI and AR are changing the way that consumers view and interact at retail and are helping physical stores to bridge the gap that was created by online shopping. While AI and AR may still have some tweaks to work out before we see it offered in every single store location, recent developments show progress that will only continue to open new avenues for marketing, sales and loyalty options.

With loyalty programs, personalization has always been a key aspect in ensuring a program’s effectiveness.  One way of personalizing the loyalty experience is through hosting interactive events, which allows participants to further interact and engage with products and offer feedback in real-time.

Now imagine incorporating technologies like Artificial Intelligence and Augmented Reality into these events that would allow us to further personalize the interactive experience and provide more options for engaging participants. It’s only a matter of time before these technologies become commonplace, and being ahead of the curve can help your business stand out!