Industry executives and experts share their predictions for 2024. Read them in this 16th annual VMblog.com series exclusive.
2024: Retail Revolution to Unleash the Power of AI Technologies
By Taylor Smith, CMO of Honeywell Productivity Solutions and Services
In the hyper-competitive world of retail, a profound transformation is underway driven by the increasing role of artificial intelligence (AI) and related technologies (including machine learning and computer vision). These technologies are set to help reshape the retail industry in 2024 and beyond.
Honeywell’s recent report, “Navigating the AI Revolution,” surveyed 1,000 retail directors across the United States, Europe, the Middle East, and Africa and found nearly six in 10 retailers are preparing to adopt AI technologies within the next year to enhance the shopping experience offered within stores and online. This industry-wide shift hinges on blending data-driven insights with human ingenuity for enhanced customer satisfaction and operational excellence.
The driving force behind this transformation is the goal to improve the customer experience (CX), which was noted as the top reason for deploying new technologies by 59% of surveyed leaders. [1] Consumers are increasingly seeking personalized, innovative and seamless shopping encounters. A recent study even shows that 61% of consumers are willing to pay a premium of at least 5% for a guaranteed positive CX. [2] Retailers understand that meeting and exceeding customer expectations is non-negotiable, and the push to achieve optimal CX is expected to intensify further in 2024.
In the next year, we expect retailers to increasingly use AI to foster loyalty, enhance productivity and elevate overall customer experience. There are four key areas where AI innovations in retail will deliver greater value in 2024:
1. Automation
In 2024, retailers will deploy AI to automate more routine manual tasks like scheduling and workforce management. AI offers significant relief to employees as it can optimize schedules based on historical data, peak shopping times and individual performance. This allows employees to redirect their focus from tasks like developing schedules to engaging with customers in person, driving a better shopping experience. Retailers that use AI to automate tasks can see improved productivity, better CX and an overall enhanced bottom line.
2. Customer Service
In the upcoming year, retailers will increasingly use AI to improve live chat and other digital channels, leading to better customer experiences and interactions. AI-driven chatbots will offer immediate and tailored assistance, aiding customers in product navigation, information retrieval and decision-making. Furthermore, AI will analyze customer data to provide personalized recommendations, enhancing the overall shopping experience. These recommendations may be based on past purchases, preferences and browsing history.
3. Data Analytics
AI-driven analytics will bring new opportunities for targeted marketing campaigns. With the capability to analyze vast amounts of data, AI enables every customer interaction to become an intricately personalized experience. By incorporating AI into marketing systems, retailers can tailor their marketing strategies with great precision, fostering meaningful connections with their target audience and driving better conversion rates.
4. Inventory Management
Inventory management is anticipated to transform with the integration of AI. With AI, inventory systems can provide real-time insights that not only minimize errors but also optimize stock levels. The result is a more responsive and adaptive inventory management system, ensuring that retailers can meet customer demands efficiently while minimizing the risk of overstock or stockouts.
AI Will Not Replace the Retail Workforce
As the adoption of AI in retail grows in 2024 and beyond, it’s important to emphasize its collaboration capabilities with the existing retail workforce. AI has the potential to optimize workforce utilization through predictive analytics, fostering improved job satisfaction and allowing more time for employees to focus on higher-value tasks. Research highlights that retailers perceive this emerging technology as a complement to and enhancer of their workforce rather than a job eliminator — in fact, the Honeywell survey revealed only 7% of retailers state that the primary purpose of these solutions would be to reduce human labor.
The use of AI in retail is not just an evolution but a revolution, ushering in a new era where operational efficiency converges with exceptional customer experiences. In 2024, businesses will start to witness the successes of early adopters, including personalized customer engagements. As this occurs, more retailers are likely to overcome reservations and embrace AI tools motivated by consumers’ rising expectations for personalized, and seamless interactions. The integration of AI with the workforce will pave the way for a dynamic future where innovation leads to unparalleled success.
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ABOUT THE AUTHOR
TAYLOR SMITH, Chief Marketing Officer, Honeywell Productivity Solutions & Services
As chief marketing officer for Honeywell’s Productivity Solutions & Services (PSS), Taylor Smith drives all marketing aspects of a business that develops and deploys an innovative range of solutions, software and services that help keep workers and workplaces safer and more productive, and supply chains and assets more efficient, accurate and reliable.
An 18-year veteran of Honeywell, Taylor has held several executive-level positions within the company, including as vice president and General Manager of its Connected Safety & Productivity Solutions business, chief technology officer (CTO) for Productivity Solutions & Services and president of Workflow Solutions.
Taylor earned his MBA from Wake Forest University. He graduated with a Master’s of Engineering and Bachelor’s of Science in Engineering from Dartmouth College.
[1] Honeywell. Navigating the AI Revolution. 2023
[2]Emplifi. 11 key things consumers expect from their brand experiences today. 2021
