How AI can create value in your retail business

Tight margins. Fierce competition. Increased customer price awareness.

In this difficult context, artificial intelligence (AI) is not a luxury—it’s a way to improve efficiency, enhance the customer experience and protect your margins.

“Whether you sell health and personal care products, furniture, clothing, electronics, or food, your customer base is the heart of your business model. And AI can help you deliver a better customer experience, while increasing your operational efficiency and margins,” says Amélie Lévesque, AI strategist at Moov AI, a Montreal-based AI strategy and solution development firm. 

9 AI use cases for retail businesses

1. Improve internal productivity

Generative AI can help you automate repetitive tasks and speed up the work of your teams now. Whether it’s writing, analyzing, or creating graphics, AI for personal productivity is generally the simplest entry point for businesses. 

“Improving internal productivity is often the simplest entry point for small retail businesses, because the tools are already available and integrate well into existing work environments,” explains Lévesque.

2. Sell more… and manage your inventory better

AI helps anticipate demand, avoid stockouts, and limit overstocking. The result is less waste, more efficiency.

“In retail, you have to have the right stock, in the right place, at the right time,” says Lévesque.

She gives the example of a grocery chain that must forecast sales for more than 5,000 perishable products in 15 stores across Canada.

3. Accurately plan workforce needs

Avoiding over or understaffing is key for retailers. 

By analyzing past sales, weather impacts, or seasonal trends, AI anticipates the need for store staff per store.

For example, if a grocery chain anticipates a spike in demand for meat products, it can hire more butchers for a given period.

4. Adjust your prices in real time

By analyzing different variables such as demand, market trends, or the competition’s prices, AI can adjust your prices on the fly. 

“It’s a great way to stay competitive, maximize revenue, and protect your margins,” explains Lévesque.

5. Automate aspects of customer service

Chatbots can answer frequently asked questions or simplify your order return and tracking process. 

This will relieve the workload for your customer service teams while improving the customer experience.

6. Improve the customer experience

AI can help analyze your satisfaction surveys, your CRM data, and customer feedback to improve the customer experience. 

“Artificial intelligence modules analyze external data on your customers, as well as your internal data. When you better understand what your clients are feeling, you can take steps to improve their overall satisfaction,” explains Lévesque.

7. Personalize your marketing actions

AI can help identify buying behaviours and tailor your promotions to individual preferences. 

For example, a furniture distributor can offer discounts to customers looking for low prices and new products for those who buy high-end products.

AI can also help with seasonal promotions or promotions via distribution channels (a separate online sales strategy from stores).

“It’s a very compelling way to use AI, but it requires good data literacy. Without clean, structured, accessible data, it’s hard to get reliable results,” says Lévesque.

8. Optimize your in-store operations

 Using in-store cameras, AI can analyze traffic, identify stock shortages, and detect bottlenecks.

It’s a way to improve scheduling or tweak store operations or layout.

9. Cut down on fraud

Using cameras or by spotting unusual payment patterns, returns, or other suspicious activities, AI can help you anticipate and prevent fraud.

AI benefits for retail businesses

1. Revenue growth

AI allows you to sell more, target more precisely, and recommend products or services.

2. Margin protection

AI helps to reduce losses, errors, and mismanaged inventory. 

3. Operational efficiency

AI can handle low value-added tasks and free up your teams for more strategic work. 

4. Improved customer experience:

AI can help provide a smoother shopping experience for your customers. 

Where do I begin?

The classic mistake is to go too fast or to start with a technological solution before you understand the real problem you want to solve.

Lévesque recommends a three-step approach to using AI in retail:

1. Choose a simple, high-impact case

Start by identifying the biggest irritants:

• Where are we wasting time?
• Where are there too many mistakes?
• Where are the teams overworked?
• Where do customers encounter friction?

2. Start small

A staff productivity assistant can be a good first step. 

“It creates familiarity with AI and helps your teams understand how AI works,” says Lévesque.

3. Diagnose your data

Many AI projects fail due to incomplete, poorly formatted, or difficult to exploit data— especially when data is entered manually and is in different formats. For example, dates may be entered in different ways, explains Lévesque. 

“Data is like the fuel that powers an AI project. If the data is fractured, poorly structured, or insufficient, AI will not be able to use it to produce results,” she explains.

Buy or build an AI solution?

In most cases, it’s best to buy an existing AI solution rather than develop a new one. 

Developing a customized solution takes time and can cost a lot of money, while buying allows you to move faster and reduce risks.

At the same time, building your own AI solution can be a good idea if your need is very specific and hard to fill with external solutions. 

Getting started

Start by identifying a recurring, high impact process that can be automated using AI. Next, prepare your data. “AI doesn’t do magic: if the raw data isn’t clear, the rest won’t be clear,” concludes Amélie Lévesque.

Next step

Get advice and preferential-rate financing to adopt AI, digital tools, and state-of-the-art equipment.