Retailers bet on AI to boost sales, and cut costs
Retailers are increasingly relying on AI to analyse consumer behaviour, reporting significant improvements in Average Order Value (AoV) and repeat customer engagement.
As AI systems become better at understanding consumer preferences, businesses are also seeing reduced operational costs and improved conversion rates, according to industry players.
“AI is transforming retail by increasing AOV and driving operational efficiencies through intelligent automation and predictive analytics,” said Jaspreet Bindra, Co-founder, AI&Beyond. He explained that advanced recommendation engines, powered by deep learning, analyse consumer behavior to deliver hyper-personalised product suggestions, enhancing basket size and conversion rates.
“Roughly an 8-10 per cent jump in AOV is observed through AI-driven personalisation and recommendations, said Amit R Shah, Delivery Unit Head, MathCo, a global Enterprise AI and Analytics company. Indirectly, strategies like demand planning and forecasting reduce costs by nearly 4 per cent and minimise stockouts, ensuring customers can purchase more, further lifting AOV, he notes.
How is AI helping retailers?
Titan integrates AI across the design-to-manufacturing process to accelerate product development. “Rendering, which converts a 2D image into a 3D model, allows us to bring designs to life faster. “We also use AI for supply chain optimisation, enabling us to track material flows, monitor storage points, and identify outliers,” said Krishnan Venkateswaran, CDIO, Titan Company Ltd.
Raymond, on the other hand, uses generative AI to refine and create products from mood boards, study trends, and define styles and garments. “Our product catalog is generated using AI, which eliminates time spent on sampling and selection,” said Ravi Hudda, Group Chief Digital and Information Officer, Raymond.
The company is also deploying its tool ‘AI Vision’technology to quantify consumer behaviour and engagement in physical stores. “Our local store marketing is integrated with the Vision AI dashboard, helping us measure customer interaction with products and assess the effectiveness of hyper-local campaigns,” Hudda added.
Raymond invests 50 per cent of its IT CAPEX and OPEX in AI-enabled solutions, partnering with hyperscalers and multiple startups to develop proof-of-concept (PoC) projects.
Cost Optimisation using AI
On the cost optimisation front, Bindra highlighted that AI enhances supply chain resilience through demand forecasting, reducing inventory inefficiencies and minimising stockouts. AI-driven automation in customer service, through chatbots and virtual assistants, improves engagement while lowering operational costs. Additionally, advanced fraud detection algorithms and computer vision technologies mitigate losses, improving overall profitability.
Echoing these benefits, Hudda noted that Raymond has observed a 5 per cent to 25 per cent improvement in key performance indicators (KPIs) since adopting AI across its operations.
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