Artificial Intelligence and Robotics in Retail

Hollywood hasn’t been very kind to Artificial Intelligence (AI) and advanced robotics over the years. Remember HAL 9000 in 2001: A Space Odyssey, Skynet in the Terminator series, or VIKI in I, Robot. All portrayed AI and robots as a threat to humankind. However, even though “the machines are rising” with AI and robots rapidly becoming part of everyday life, society seems to be getting more comfortable with the idea.

Admit it: Many of you commonly include “Alexa,” “Siri” and “OK, Google” in your daily conversations. In fact, according to the Pew Research Center, nearly half of Americans (46%) already use voice assistants when interacting with a variety of devices, and those devices use a basic form of AI to answer questions and requests. It’s technology that iEdison light bulbs rapidly becoming the cutting edge of how robotics interacts with people, and there are many ways small businesses can put AI and robotics in retail to good use.

Although there is still a general feeling of unease when people consider artificial intelligence and robotics, most consumers and business people feel the technology will eventually improve their quality of life. A Price Waterhouse Cooper (PwC) study says most (63%) believe AI could help solve complex issues that plague modern society. And while 59% say its use will help people lead more fulfilling lives by eliminating mundane tasks, close to half (46%) think AI will eliminate jobs, and when it comes to Hollywood’s doomsday apocalypse view, 23% predict AI could have serious sociological implications.

In a 2017 survey by, just 15% of enterprises admitted to using artificial intelligence, but 31% said it’s in their plans over the next 12 months. Those same retailers said they see consumer personalization (29%), AI (26%) and voice search (21%) as the top three business trends, and Forbes listed AI as a driver of customers’ retail experience as its No. 1 business trend this year.

A few other facts from include:


Approximately 47% of organizations that have advanced digital practices, indicated they have a defined AI strategy.


Business leaders said they believe AI is going to be fundamental in the future with 72% seeing it as a “business advantage.” Source: PwC


Of the businesses with an innovation strategy, 61% said they are using AI to identify opportunities in data that they would otherwise would have missed. Source: Narrative Science


As expected, consumers use more AI than they realize. While only 33% think they use AI-enabled technology, 77% already use an AI-powered service or device. Source: Pega


A recent survey of over 1,600 marketing professionals, showed 61% said machine learning and AI is their company’s most significant data initiative for next year. Source: MeMSQL


Astonishingly, 38% of consumers said they believe AI is going to improve customer service. Source: Pega

AI can also help retailers better understand their customers through data analyzation.

“Data has become the new currency of marketing, and marketers now have access to more data than ever,” Frank Palermo, of IT consultancy Virtusa, tells “The question comes down to how to harness the value from that data.”

There are several ways AI can help retailers reach more new customers and better satisfy the ones they have.

Predictive Analytics

Predictive analytics are smart tools that can help forecast customer behavior using sales data. Google uses it to make recommendations based on your search history, location and regional search trends. Amazon and many other shopping platforms use it to provide product recommendations, again based on past sales data. And online dating websites use predictive analytics to find you the perfect date or mate.

In retail, I think the customer experience is actually one of the most important things to really bring life back into the brick-and-mortar world. We’re seeing, across the board, customers looking to have a differentiated experience.
Link Simpson

Digital Transformation Lead , CDW

Content Generation

Retailers can further enhance their website’s or store’s attraction by customizing messages they send to customers. A specialized AI field called natural language generation (NLG) sends targeted messages and offers to shoppers.

It all adds up to cognitive computing. In IBM’s survey, 91% of retail executives said they believe cognitive computing and robotics in retail will play a “disruptive role” in the industry, and 83% believe it will have a critical impact on the future of their businesses.

“Cognitive fits into retail primarily in the area of providing better customer journeys. You can use it to make recommendations and guide people through the buying process by having more expertise embedded into the web or app experience,” Chris Williams, IBM Watson, chief architect for Europe, tells

“In retail, I think the customer experience is actually one of the most important things to really bring life back into the brick-and-mortar world,” Link Simpson, digital transformation practice lead at CDW, tells BizTech Magazine. “We’re seeing, across the board, customers looking to have a differentiated experience.”


Retailers can use the data gathered through point of sale systems to personalize both online and in-store shopping experiences for their customers.

Use AI to Enhance Store Staff

All the AI in the world won’t help storefront retailers if it isn’t put to work on the sales floor. The National Retail Federation 2018: The Big Show revealed that 98% of retailers are interested in using sales and shopping behavior data analytics to enhance their store’s customer experience.

“In retail, I think the customer experience is actually one of the most important things to really bring life back into the brick-and-mortar world,” Link Simpson, digital transformation practice lead at CDW, tells BizTech Magazine. “We’re seeing, across the board, customers looking to have a differentiated experience.”

That means using AI, sales and shopping data, and now, in some cases, robotics in retail to enhance a store’s shopping experience. It’s no secret that Amazon, which pioneered online shopping, is now venturing into bricks-and-mortar stores. It already has more than 450 Whole Foods Markets stores after purchasing the chain last June, and lately is eyeing some of the bankrupt Toys R Us locations.

Amazon is one of many companies using robotics in its retail warehouses to fill online orders. Not long ago, retail giant Walmart moved robots onto the sales floor, using them to scan shelves to find sold-out, missing or misplaced items. Techmergence, a market research firm specializing in AI and retail robotics information, says robotics can be used in several ways by retail businesses to improve business and drive sales.

The firm recently highlighted several case studies where companies used robotics in retail to enhance and improve the in-store customer experience, work and manage warehouses, and use robots to deliver goods.

Smart Vending Machines

Soft drink companies, which have been experiencing decreasing sales dating back to 2002, are now combining AI and robotics in retail to give consumers more variety. Go into almost any fast food business nowadays and you’ll find self-serve dispensing machines, some of which allow you to mix and match different flavors. The machines not only create new tastes for consumers, they collect information on what they’re pouring and pass it back to the soft drink companies which use that data to offer new packaged flavors. Coca Cola’s introduction of Sprite Cherry and Sprint Cherry Zero came in response to data gathered from the freestyle dispensing machines.

Robots on the Sales Floor

In 2016, hardware giant Lowe’s introduced the Lowebot in its San Francisco stores. Customers have the option to ask the Lowebot basic customer service questions – sound familiar Siri? – or use a touch screen to find items in the store.

Taking that technology a step further, Softbank, a multi-national Japanese conglomerate, introduced a humanoid robot named Pepper in many of its stores in 2014. Like Honda’s Asimo, an acronym for Advanced Step in Innovative Mobility, was one of the first robots in retail, appearing in television commercials way back in 2000, Pepper can interact with customers, giving directions and answering questions. It is also programmed to light up, dance and even take selfies with customers.

Robots in Management?

The thought of robots managing warehouses isn’t quite what it sounds like. They aren’t supervising employees and filling out reports. Instead, they are filling orders and managing (moving) inventory.

Amazon’s use of robots in retail is well documented, but Best Buy began testing Chloe, an automated retrieval robot that picks products from shelves and deliver them to customers, in some of its New York stores. Customers can choose items they want on a touch screen monitor and Chloe will deliver them. Imagine the claw that plucked Woody and Buzz Lightyear from the prize bin at Pizza Planet in the hit motion picture Toy Store, only on a much more industrial scale.

Taking It to the Streets

As the technology of driverless cars advances, many companies are already seeking ways to utilize it to better serve their customers. The well-known pizza chain Domino’s is experimenting with driverless delivery vehicles known as DRU (Domino’s Robotic Unit) that delivers pizzas in Australia. The company also has its own air force. It began experimenting with unmanned aerial vehicles (UAVs), delivery drones, in New Zealand in 2016.

Robots ROI

According to the case studies by Techmergence, there isn’t much data on the return on investment (ROI) of using robot in retail. A certain amount of business has been traced for companies drawing curious shoppers by using high profile robots. A tech store in Palo Alto reported it had a 70% increase in foot traffic when Softbank’s Pepper worked there, and a store in Santa Monica reported a 13% increase in revenue and 600% increase in sales of a featured product when Pepper worked its sales floor.

Warehouse robotics can save business owners by cutting personnel costs, one of the doomsday effects, but they also have other benefits. Robots with barcode scanners can quickly locate misplaced merchandise and track inventory. Through touch-screen integration, they can retrieve products for customers when store employees are busy with other duties.

They also can stack products higher vertically, increasing valuable floor and shelf space. Best Buy’s Chloe also tracks shopping trends through retrieval and sales data to refresh inventory.

What About Small Business?

While much of the cost of artificial intelligence and robotics in retail technology may seem like pie in the sky for small business, retailers are already combining the technology with their sales data to enhance their websites and stores. says intelligent customer relationship management (CRM) systems compile consumer information across various platforms – email and social media – which provides sales people with valuable information. Point of sale (POS) business solutions provide the same kind of data based on your store’s sales history and, combined with effective customer loyalty or rewards programs, give store owners a great deal of insight into their customers’ spending habits.

Knowing buying trends and a customer’s past purchases allows small businesses and marketing people to customize and target advertising and special offers to them. Small retailers are further customizing advertising and marketing through social media channels. They are also analyzing its results through online resources such as Google’s AdWords.

The PwC report says the investment in the AI market is forecasted to reach $70 billion by 2020.

Just like in the movies, the “machines are rising.” In fact, many would argue the revolution is already here. For retailers and shoppers alike, there are many ways to embrace the new technology and make buying and selling a much friendlier world.

Brian Bullock