BMG575 Research Methods Assignment Sample
IMPLEMENTATION OF AI IN THE RETAIL INDUSTRY TO UNDERSTAND THE CUSTOMER BUYING BEHAVIOR
1.0 Introduction
Hook
In the recent time of global modernization and digitization, the emergence of Artificial Intelligence has not only revolutionized the human work periphery but alos has evolved it to a greater extent.
Background
In light of technological advancements, the concept of Artificial Intelligence holds an area of high prioritization. Technically, an AI is interpreted as a stimulation concerning human intelligence procedures through machines, chiefly computer systems. Marvin Minsky who is greatly known as a cognitive scientist was optimistic regarding this technology and the term AI was first coined by Dartmouth College around the year 1956.
Figure 1: Domination of Ai in retail
(Source: Sarah, 2019)
Outline
The literature review concerning this report will highlight the significance, application and opportunities of utilising AI in the retail sector. Moreover, the consumer support, acceptance and their relationship with the AI will be underli8ned thoroughly. In the final phase of this report, the usability, potential challenges and the means to overcome the issues concerning AI will be addressed in an effective manner.
2.1 Identification of the specific researchable topic area
In light of this significant report, the context of Ai is widely researched and explored due to its innovative features and diverse technological aspects. The core influence of academic researchers regarding AI and its application is due to exploring the ability of AI in the progress of human work periphery without human intervention.
2.2 Establishing the Significance of the problem
Through critically evaluating the academic work of Cao (2021), where the author has outlined the essential significance of Artificial Intelligence in the retail sectors as well as pointed out the effectiveness of AI sausages in different work circumferences. The analysis of the academic research has assisted in comprehending the means through which Artificial intelligence is being widely accepted and adopted in retail industries and benefiting them to the core. Moreover, the acute utilisation of Artificial intelligence is enabling a touch of innovation to the data management of the retail sectors that are asserting in deciphering consumer behaviours. Moreover, the role of artificial intelligence in influencing consumer behaviour has also assisted in developing a deep insight related to the research context (Sima et al. 2020)
2.3 Research Aim
In light of this significant research report, the central aim of this research is to critically evaluate the adoption and implementation of Artificial Intelligence in the periphery of the retail sector, in order to understand the buying behaviour of the consumers.
2.4 Research Rationale
The rationale concerning this critical evaluation is to develop a better understanding of the influential aspects of Artificial intelligence and the positive impacts it lefts on the customers buying behaviour. Through undertaking an acute analysis of Artificial intelligence in association with the retail industry, it will ensure the identification of core beneficiary traits of Ai and their significance in comprehending the consumer purchase behaviour (Davenport et al. 2020). In addition, the research will help in gaining future insights related to the enhanced and wide application of artificial intelligence for achieving better customer satisfaction through understanding their buying behaviour of them. This research will unveil the future possibilities of AI in influencing consumer’s behaviour in a positive manner.
3.0 Research Question
The concern that is researched and addressed through this research report is related to the implementation of Artificial Intelligence for comprehending the buying behaviour of the consumers in the retail industry.
3.1 Research Objectives
The adoption of Artificial intelligence is becoming an emerging trend that has been transforming the technological periphery through its innovations in a worldwide context. Also, due to its technological efficacy, AI is being globally appreciated.
- To assess the benefits of implementation of AI in the retail industry
- To determine the connection of customer relationship management and AI
- To evaluate the challenges and strategies in relation to the implementation of AI
4.0 Literature Review
Importance of AI in the retail industry
Artificial intelligence is such a technology that has brought a new level of “data processing” in a complete manner that helps in order to provide business insight in a deeper way. As stated by Weber and Schütte (2019), AI helps every retailer in order to improve their demand for making decisions based on pricing, optimising placement of a variety of products and many others. In a similar context Silva et al. (2019) state that purchasing advice, personal content, dynamic pricing as well as other advice have become widely accessed in the industry based on retail markets. Moreover, it can be said that almost “real-time” consequences have that potentiality in order to expand every “scope of data” that are being obtained from algorithms as well as existing customers that have a similar “human-like” behaviour. For example, Amazon can be taken as one of the most used AI technologies in recent times, particularly in relation to online retail stores.
On the other hand, Gursoy et al. (2019), state that AI undoubtedly has given an intelligent gadget that helps human beings in every aspect, yet it has made a huge negative impact on them because they have become dependent. Therefore, virtual stores are in higher demand in the present day than physical stores. Hence, it can be said that AI is helping retailers such as Amazon with an intention to provide advice to customers with the help of algorithms operated through AI. Thus, with the help of AI, the needs as well as preferences of customers are informed to retailers and accordingly serving is processed based on the data.
Application of AI in the Retail industry
As an application of AI is considered as the most important for retailers in the present days, they have experienced a variety of opportunities in terms of business transactions. As stated by Kircova et al. (2021), the contribution to stores depending on physical stores has that potentiality with an aim of changing their department significantly as well as widely. In a similar context, Ostrom et al. (2019) state that AI is considered as one of the greatest abilities in relation to Retail applications and this includes:
Personalised production and Design
AI uses this personalised data with an aim of gathering insights related to similarities in the preference of customers through collecting both online and offline data about them. As opined by Wirtz et al. (2019), AI can be used for finding patterns in the behaviour of customers by pulling all information from the consumer purchase history or other demographic data. Lastly, it works as a product recommendation for every customer.
AI operated content
AI has reached the level of wiring a content paper that creates value to the resonant content with an intention to attract customers.
Chat bots
In regard to AI Mariani et al. (2021) state that the technology based on AI helps in order to provide “human-machine interaction” depending on natural language with the help of AI.
Thus, the above are some features that AI is processing as well as working and all these are being adopted by retailers and are leading to huge success in the world of business both in physical and virtual stores.
Consumer’s support and acceptance of AI in the retail industry
Consumers are highly supportive as well as accepting the importance along advantages of AI in the retail industry as well as in their daily lives. This can be said because, with the introduction of AI, people have started to get the advantages and its easy accessibility for which their lives have become more easy and comfortable along with it leads to their advancements in every aspect of life. As opined by Klaus and Zaichkowsky (2020), the involvement of AI in buyer and seller transactions helps to evaluate as well as analyse the preferences as well as needs or requirements of customers. On the other hand, Habib and Hamadneh (2021), state that by segmentation of the audiences, AI is also helping organisations in order to understand the customer’s requirements. Therefore, AI is helping to predict the “purchasing behaviour” of customers who have particularly been targeted in the easiest as well as possible manner.
In a similar context Liang et al. (2020) state that customers are enjoying this feature and role of AI because it makes customers less accessible to get knowledge of any product or service as earlier days. Therefore, with a variety of features such as personalisation, chat bots, content, customers are getting attracted and all of them are easily accessible to them.
Opportunities arise from using AI
Science has accelerated the entire world into the advancement of technology and this “real-time” application has proven the enhancement of business value. As stated by Elsayed and Erol-Kantarci (2019), there are ample opportunities that work as a part of AI and its usefulness in the lives of people in terms of business, health care, transport systems and many others. Concerning the variety of opportunities that AI is providing particularly in respect of retail industry are as follows:
Stores can be able to avail “cash-free” facility
The robotisation of retail stores is going to help customers in reducing as well as lowering the lines or queues that are seen in retail shops during the time of payment and returns or many others. As stated by Tan (2018), physical as well as online stores have made one thing clear there is no traditional way of shopping being initiated; rather customers are taking initiative in making their choice and picking products of their own. During the period of payment online options are there. On the other hand, De Bruyn et al. (2020) state that, in terms of return or refund, the money comes back to the particular online platform’s wallet, for instance, Amazon Go, such that business marketing might not hamper.
Visual search of products
AI has given an opportunity to the customers in order to upload as well as find the product that the customer wants to purchase. As opined by Campbell et al. (2020), AI is making the lives of people highly comfortable and easy because this is the reason they are supporting along with accepting the usage of AI in this recent period of time. In a similar context, customers are able to find the exact or a similar product for which customers are designed and clicking the picture for what they are searching is the only solution.
Relationship between Customer relationship management and AI
Customer Relationship Management, as well as AI, has an enormous amount of understanding among themselves. As opined by D’Arco et al. (2019), AI has the ability in order to understand the betterment of customers through their choices, preferences, demands as well as requirements. Therefore, AI has discovered the needs and requirements of customers for offering a “personalised experience”. In a similar context Dewnarain et al. (2019) state that with the usability as well as the help of CRM, any business has the potential to collect reliable information and data that can be managed for centralised communications. On the contrary, Stone et al. (2020) state that AI is required to thrive for CRM in this era of transformation to digitalisation. Thus, AI and CRM are linked in relation to the company’s relationship and customer interactions.
The usability of AI in both Physical and Online Retail
In view of the high volume significance of Artificial Intelligence in different working spheres and its revolutionary impact in the improvement of different industrial work operations, the capabilities of AI is unprecedented. In the retail sector, AI with its unbelievable capacities of managing customer data and understanding customer behaviour and preferences are thoroughly contributing to the retail industries. The strategically approach of Retail industrialists through the adoption of AI contributes to their data management and enables effective solutions through appropriate decision making (Cao, 2021). Artificial intelligence as an intelligent and automated system not only helps the shoppers through making their shopping experiences easy but also helps the retailers to identify the shopper’s behaviour towards purchasing and expenditures through highlighting trends and patterns.
Sima et al. (2020), reflects that the technology integration through the use of Ai has changed the means of interaction between retailers and customers. The author concerns the adoption of Artificial intelligence by unveils that, AI has made it easy to reach customers and offer them their preferences for the retailers. In fact, the implementation of Ai is capable of offering personalised consumer experiences to the customer that also influences the buying decision of customers in an effective manner. The expansion of customers’ access to retail products through Smartphone’s and online retail websites has also positively impacted customer buying behaviour (Sima et al. 2020). The recent emergence of covid-19 has made consumers feel uneasy with the physical payment methods which were observed as an obstruction for the retailers, however, the use of digital payment methods has helped in changing the buying behaviour of consumers associated with the payments.
Challenges in relation to the implementation of AI
In consideration of implementing Artificial Intelligence for the benefit of the retail industries, there are certain challenges that have been observed in the implementation process of Artificial Intelligence in retail. In the recent era of innovation and technology, the cost of technology and AI-oriented systems is sky-high, which is deemed as a core challenge related to the implementation of Artificial Intelligence systems. In some contexts, the user’s dissatisfaction with the complicated use of the user interface can also be considered as a potential barrier (Shaw et al. 2019). Through undertaking a quick evaluation regarding the basic challenges that might occur regarding the implementation of the AI is lack of knowledge regarding the usage of Ai and lack of skilled personnel for handling the AI. The fairness and ethics in the usage of retail technologies are also considered an issue. For example, the adoption of facial recognition technology can be biased at times as the machine learning models on which it relies are trained heavily on biased data (Shankar et al. 2021).
Possible strategies to overcome challenges
Although there are various challenges related to the implementation of the Ai in the retail industry, however, there are certain measurements that can be helpful in this context. Firstly it is essential to address an effective AI vendor with the appropriate expertise and portfolio. Secondly, it is essential to collaborate with a business analyst that is skilled in determining the beneficiary IT systems and processes concerning AI. The consideration of potential ethical issues that might obstruct the usage of AI must be adhered to by the retail industry. Effective training related to the usage and application of AI in business processes and systems will not only ensure that the retailers are well aware of the knowledge but will enable the fullest use of AI (CAmpbell et al. 2020). The devising of a project implementation map for the AI in a detailed manner that covers scaling, integration and solution development will also help in the mitigation of possible challenges related to the implementation of Ai in retail.
5.0 Conclusion
Thus, it has to be concluded that AI has become the greatest innovation in the present days for which people are getting much accessibility in terms of the retail industry. AI helps in online retail stores by catching the data and algorithms and accordingly, it starts to show similar products to the customers through other social media platforms. Similarly, AI and CRM have huge connections in relation to personalised experience in retail stores. Based on the overall analysis there are various significant insights related to the implementation of artificial intelligence and understanding customer buying behaviour. The significance of the study related to the important research context has assisted in the development of vital insights. In fact, the usability of AI in physical and online environments has assisted in developing a vivid understanding related to the usefulness of AI in the retail industry.
6.0 Reference List
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