Skip to main content

Why Traditional Retailers Must Adopt AI Innovation

The North America retail market is an example of incumbent disruption and slow-moving, executive responses to technology-fueled change. The world's largest consumer-driven economy is likely a precursor to market shifts that will impact retailers across the globe.

Clearly, prior success with traditional retailer business models is no indication of the potential for future performance. The emergence of eCommerce giants such as Amazon and eBay from the mid-1990s has created a long-term challenge for most old-school retailers.

Many legacy in-store retailers have met this challenge by attempting to offer a compelling omnichannel experience, where the physical retail and online channels merge through the use of solutions such as 'click and collect'.

While this has improved the customer experience, it has not prevented the disruption of traditional retailers, with multiple large-scale insolvencies -- including Toys R Us and Sears. Therefore, the surviving retail CxOs must further adapt their business models in order to compete and prosper.

Start by following the market leaders. There's already momentum behind leveraging the tools that the leading eCommerce pioneers have used to such great effect, primarily Artificial Intelligence (AI).

Retail AI Market Development

Chatbots are one example of retail AI in action. The global number of successful retail chatbot interactions will reach 22 billion by 2023 -- that's up from an estimated 2.6 billion in 2019.

According to the latest worldwide market study by Juniper Research, chatbot use by retailers will enable effective automated customer interactions for retailers.

This innovation can deliver high-quality user experiences in a low-resource way, boosting customer retention and satisfaction whilst also reducing operating costs. A crucial enabler of this will be improvements in Natural Language Processing (NLP), which will dramatically reduce the failure rate of chatbot interactions, by making them more natural and valuable for customers.


Juniper analysts anticipate that retailers who do not adopt chatbots will likely experience challenges from more technologically-adept disruptors, who will use chatbots as an extension to the crucial omnichannel retail experience.

The study also found that chatbots leveraged for customer service have a strong potential to reduce costs -- with deployments realizing annual savings for retailers of $439 million globally by 2023, up from just $7 million in 2019.

These potential savings will act as a key ‘pull’ factor, given the margin pressure that many retailers are presently feeling. "By embracing automated customer service with chatbots, retailers can act in a more flexible and efficient way. The wider retail market means that chatbots are no longer a luxury, they are essential," said Nick Maynard, senior analyst at Juniper Research.

Outlook for AI-Driven Retail Innovation

Meanwhile, retail sales resulting from chatbot-based interactions will reach $112 billion by 2023 -- that's up from $7.3 billion in 2019; representing an annual growth rate of 98 percent.

However, the research found these sales will largely be a result of migration from other channels, rather than a new revenue stream. Accordingly, Juniper emphasized that while retailers must adopt chatbots for ease of use, their ROI will come from efficiencies, rather than new growth.

Popular posts from this blog

How the COVID-19 Pandemic Advanced Telehealth Adoption

The global COVID-19 pandemic has accelerated digital transformation across many industries. As an example, consider the healthcare sector. Some routine medical situations can be diagnosed and resolved online. While the trend was already in motion long before the pandemic arrived, the adoption of telehealth increased rapidly in 2020. Around the world, many governments responded to the disruption and inaccessibility of healthcare facilities by loosening previous regulations and restrictions on the practice of telemedicine apps, and teleconsultations. This decision resulted in the mass adoption of these medical services among patients and providers. According to the latest market study by Juniper Research, telemedicine will save the healthcare industry $21 billion in costs by 2025 -- that's rising from an estimated $11 billion in 2021. This increased app usage represents an anticipated growth rate of over 80 percent in the next four years. Telehealth Services Market Development The co

Worldwide Semiconductor Demand will Accelerate in 2021

The technology sector is a key driver of the U.S. economy. Therefore, components like semiconductors play an important role in America's future. The 'CHIPS for America Act' is a new law that calls for incentives on domestic semiconductor manufacturing and investments in research and development. But these renewed efforts will require years of ongoing commitment. Meanwhile, despite the impact of the COVID-19 pandemic, the semiconductor market performed well in 2020. However, new demand by industry was uneven throughout last year due to global lockdowns, remote working adoption, and shifts in consumer and commercial buying behavior. Worldwide semiconductor revenue grew to $464 billion in 2020 -- that's an increase of 10.8 percent compared to 2019, according to the latest market study by International Data Corporation (IDC). Semiconductor Technology Market Development IDC now forecasts that the semiconductor market will reach $522 billion in 2021, that's a 12.5 percent

Hyper-automation Propels Superior Business Process Redesign

When the world was disrupted by a global pandemic during 2020, many CEOs and their board of directors were consumed by reacting to immediate problems. Meanwhile, a few forwarding-thinking enterprise leaders also paused to invest in accelerating their prescient digital transformation agenda. What enables executives to envision an opportunity while others see only challenges? Strategic foresight, and a willingness to embrace the apparent changes that are transforming the legacy status quo. During this period of uncertainty, hyper-automation investment has gained new momentum. Hyperautomation is the application of advanced technologies that augment humans by helping to streamline processes in new ways that are significantly more impactful than the legacy approach. Hyperautomation Market Development The global market for technology that enables hyperautomation will reach $596.6 billion in 2022, according to the latest worldwide market study by Gartner. This is up from $481.6 billion in 202