The Rise of Artificial Intelligence (AI) in a modern society

The rise of artificial intelligence (AI) within modern society is unstoppable. More and more applications and digital tools are equipped with AI functionalities, while AI technology is evolving at a rapid pace. This leads to the emergence of solutions that are much smarter and more versatile than the first generation of AI tools that emerged years ago.

The influence of AI is certainly noticeable in the world of retail and fashion. AI offers numerous opportunities to better understand customers and tailor your services and product offerings to their wishes and needs. But how do consumers actually feel about AI? Do they trust it? And how can you leverage the influence of AI on shopping behavior to give your sales and marketing a quality boost? You’ll find out in this blog article.

How do consumers feel about AI?

The retail world, particularly a trend-sensitive segment like fashion, is in constant motion. AI enhances this dynamic, creating both opportunities and potential dangers. On one hand, the technology provides ample ways to improve customer journeys and experiences, while on the other hand, AI introduces new challenges in terms of safety, emotion, and empathy.

The reality is that many consumers remain somewhat skeptical about AI’s role in the modern shopping experience. Research by Voyado shows, for example, that 46% of respondents do not believe AI can replace humans. More than a quarter (27%) of respondents hesitate to make purchases from stores that solely rely on AI or automated customer support.

Interestingly, both the oldest and youngest generations are the most sensitive to the lack of human interaction that AI poses. 33% of Generation Z and 38% of the Silent Generation are less likely to shop at companies or websites that offer only AI and automated support. On average, Voyado’s research reveals a moderate distrust of (fully) automated services. For instance, 44% of respondents disagree with the statement that “an AI tool or robot provides more relevant recommendations than actual store staff.” Additionally, 46% believe that automation and AI cannot replace humans.

How to successfully utilize AI

There is certainly some resistance to AI. This is partly because many consumers perceive AI as primarily suited for functionalities that can be seen as mere “gimmicks.” In reality, AI has much broader potential and offers unprecedented possibilities to provide customers with more personalization and relevance. The future of loyalty lies in fashion retailers’ ability to deeply understand customers and provide exactly the right products at the right time and place (both digitally and physically). Effectively utilizing AI is not about replacing human interaction, but rather enhancing it. In this way, AI creates and supports personal relationships that seamlessly span all touchpoints, both online and in physical stores.

There are various ways to purposefully harness the power and positive attributes of AI within retail and your daily processes.

Personalizing shopping experiences

Modern AI algorithms have the computational power needed to sift through and analyze large amounts of customer data for recurring patterns. The result? You gain insights into customers’ preferences and purchasing habits based on previous purchases and browsing behavior. This makes it easier to offer personalized promotions. This, in turn, increases the likelihood of satisfied and loyal shoppers who make repeat purchases at your online store or physical location.

More accurate inventory management

AI is also useful for optimizing your inventory management. Accurate demand forecasting, which utilizes historical data, current information, and future expectations, reduces the risk of overstocking and the chance of having insufficient inventory that hinders timely order fulfillment.

Supporting customer service

Chatbots and virtual assistants can support your customer service 24/7. For instance, they can answer customer questions or help people find products. By deploying chatbots and virtual assistants for relatively simple inquiries, your specialized customer service staff can focus more on complex or sensitive issues that require a human touch.

Conducting trend analysis

Lastly, modern AI solutions can be employed for conducting trend analyses. By systematically scanning blogs, websites, and social media, retailers can stay updated on the latest (fashion) trends. Effective AI trend analysis makes it easier to respond to the latest fashion trends and provide exactly what your target audience is seeking.

How TCOG Helps

AI has a lot to offer fashion retailers when the technology is effectively utilized and skepticism among certain customers is alleviated.

TCOG supports fashion retailers by offering integrated software solutions such as LS Retail and Microsoft Dynamics 365 Business Central. Through Copilot, AI is seamlessly integrated into these systems, which centralize and optimize all aspects of business operations. By utilizing AI for demand forecasting and inventory management, you can operate more efficiently and improve customer satisfaction. Innovative POS systems and omnichannel integration ensure a seamless and personalized shopping experience, while sustainable practices and logistical efficiency lower operational costs and enhance brand value.