Innovation of Artificial Intelligence in Retail Market

This research report investigates the innovation of Artificial Intelligence (AI) within the retail market and its significant impact on consumer retention. The report analyzes how AI enhances both consumer and employee experiences, leading to improved operational efficiency and successful company objectives. A detailed methodology is employed to explore AI's role in various aspects of retail, including logistics, deliveries, and customer service. The study examines both the positive and negative implications of AI adoption, highlighting its transformative influence on the retail landscape. The report also addresses research limitations and ethical considerations, providing a comprehensive overview of AI's influence on the retail industry and its ability to drive consumer loyalty and business success. The findings cover AI's impact on customer personalization, machine learning applications, and the use of robotics to enhance foot traffic, streamline cash registers, and improve customer relationship management, including supply chain management.

Running head: INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
Innovation of Artificial Intelligence in Retail Market to Retain Consumers
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1INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
Executive Summary
This research work depicts the importance of innovation of Artificial intelligence in the retail
sectors for retaining consumers. From the operational and functional detail analysis report it is
found that, Artificial Intelligence (AI) gives positive work ambiance to the consumers and also
keeps the employees engaged to their job roles for the successful completion of the company
objectives. A detail research methodology is being followed in this research work by the
researcher for the successful completion of the research topic “Innovation of Artificial
Intelligence in Retail Market to Retain Consumers”. The decision making power of the
employees increase and in addition to this for the logistics and deliveries also AI gives positive
impact. Moreover, this research detail shows both the positive and negative impact of AI in retail
sector including its role in consumer retention.

2INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
Table of Contents
Introduction......................................................................................................................................3
1.1 Research background.............................................................................................................4
1.2 Research objectives...............................................................................................................4
1.3 Research aim..........................................................................................................................4
1.4 Research questions.................................................................................................................5
2. Literature review..........................................................................................................................5
2.1 Overview................................................................................................................................5
2.2 Role of Artificial Intelligence (AI) in retails industry...........................................................6
2.3 AI revolution in the retail industry........................................................................................6
2.4 Role of Artificial Intelligence (AI) in logistics and delivery.................................................7
3. Methodology................................................................................................................................8
3.1 Research philosophy..............................................................................................................8
3.2 Research approach.................................................................................................................9
3.3 Research design.....................................................................................................................9
3.4 Data collection.....................................................................................................................10
3.5 Data techniques....................................................................................................................11
3.6 Ethical consideration...........................................................................................................11
3.7 Research limitation..............................................................................................................12
4. Findings.....................................................................................................................................13
Conclusion.....................................................................................................................................13
Recommendation...........................................................................................................................14
References......................................................................................................................................15

3INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
Introduction
This research work is focused on innovation of artificial intelligence in the retails
industry and its positive impact for retaining the consumer. After analyzing the details
operational and functional details of this technology excellence it has been found that the
Artificial Intelligence plays active role in the retail industry and give high level opportunities to
both the consumers and the employees who are working for the specific company. This research
work elaborates and explores the emerging opportunities of Artificial Intelligence in the retail
industry.
Artificial Intelligence (AI) technology helps to discover new technologies from the visual
search to machine driven sales forecasting as well as and also helps to find out the way through
which the revolution is tied up with the retail industry success. Moreover, it can be said that
Artificial Intelligence is transforming the retail conversation. The research methodologies used to
successfully conduct the research work are also illustrated in this paper. Not only this but also
the research limitation and ethical considerations are also illustrated in this paper.
1.1 Research background
With the immediate innovation of Artificial intelligence (AI) it was applied in many
industries and simultaneously the application of the technology keep on increasing in retails
industries also to reduce the operational and functional errors (Gunning 2017). Over the last few
years this technology made certain amazing improvement in the retail sector. The application of
the Artificial Intelligence (AI) in the retail industry is keep on generating quite positive vibes
among the consumers and also among the employees. These days due to excessive external
frauds the retails industries are losing consumers but with the innovation of the Artificial
Intelligence (AI) the rate of the online frauds will reduce (Wang, Fan and Wang, 2018). Both the

4INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
positive and the negative impact of the Artificial Intelligence (AI) in the retails industry are the
focus on this research paper. It is also defined that the customer service will be shaped more
professionally with the innovation of the Artificial Intelligence (AI) technology.
1.2 Research objectives
The objectives for this specific research are as follows:
 To identify the issues that the retails industries are facing due to lack of
application of technical excellence
 To innovate Artificial Intelligence (AI) in the retail sector
 To apply the technology in such a way so that the industry can retain the existing
consumers
1.3 Research aim
The aims of this specific research are to identify the role of different technologies in retail
industry for improving the service process with quality and on time delivery of products. It has
been found that, with the successful delivery of the consumers desired products the company will
be able to gain effective success and new consumers as well. Besides new consumers they will
also be able to retain the existing customers. The detail landscape of consumer service will be
changed with the innovation of Artificial Intelligence (AI) in the retail industry.
1.4 Research questions
The research questions highlighted for the specific research work are as follows:
 What are the different issues facing by the retail industry due to lack of technical
excellence?

5INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
 How to innovate the Artificial Intelligence (AI) in the retail industry?
 How Artificial Intelligence (AI) can be applied in the retail industry to retain
consumers?
2. Literature review
2.1 Overview
Retain industry is one of the largest industries in this world which is estimated in total of
$5.8 trillion in sales in the year of 2017. This net value is greater than the value gained from the
retails market analysis in the year of 2017. According to Bond and Gasser (2014) the Artificial
Intelligence (AI) will help the consumers to experience a completely new direction of shopping
for both the offline and online stores. Artificial Intelligence (AI) in the retail industry is being
applied as a completely emerging way. The form of shopping changes from before the selling of
the products and after the purchasing of any product.
2.2 Role of Artificial Intelligence (AI) in retails industry
The businesses of future must keep up with the expectation of the consumers and must
implement Artificial Intelligence (AI), whenever it seems to be helpful. As many new
technologies are being incorporated that much the role of the AI are found to be transforming the
industry details. According to Charniak et al. (2014) cognitive computing plays disruptive role
play in the industry. This technology helps the company to gain competitive advantages and
commercial revenue as well. The more the loyalty increases the more rates of sales and
economical profit will increase.

6INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
2.3 AI revolution in the retail industry
With the revolution of Artificial Intelligence (AI) in retail industry the business changes
and the commercial benefit that may occur are as follows:
Personalized customer experience: The personalized customer experiences are utilized
for driving the product sales, to grab new consumers and also to retain the existing consumers.
The way of business are also getting revolutionized and helping the industries to install digital
technologies, purchase history as well (Brynjolfsson, Rock and Syverson 2017). In order to
reach out the shoppers whoever wish to gain relevant shopping experiences the consumers
personalization act as an innovative way for the retails industry. On demand personalization is
referred to as an important customer believe.
According to Makridakis (2017) there are some areas which helps with personalized
experiences in terms of chatbox experience, conversational interfaces, digital wearable and
virtual mirrors. The other areas are as follows:
Machine learning: With the help of machine learning the companies can provide the
consumers with more personalized experience of shopping.
Robots for enhancing the foot traffic: The humanoid robots can chat along with the
consumers by answering different questions and through diving them proper direction for
increasing through foot traffic within the stores for high rate of revenue (Urieli and Stone 2016).
Automated cash registers: In order to speed up and increase the overall efficiency of
the retail businesses the AI technology is incorporated in the retail industry for automating the
self checkout lanes (Riikkinen et al. 2018). It speeds up the overall process and saves the labor
cost.

7INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
Customer relationship management: The customer relationship management between
the customers and the service providers become stronger and Artificial Intelligence (AI) helps
the retails industry head to make the business more consumer focused (Smilansky 2017). The
useful information of the consumers will also create a proper marketing plan and also will
shorten the automate marketing and product sales cycle both online and offline.
Improve manufacturing details: with the successful implementation of the Artificial
Intelligence (AI) in the retail industry the virtual workforce empowered. Through the usage of
the warehouse robots the manufacturing rate also gets increased. Wamba et al. (2017) stated that
the consumer level queries also get resolved with the application of optimal accuracy and
industry workflow.
2.4 Role of Artificial Intelligence (AI) in logistics and delivery
Artificial Intelligence (AI) in logistics as well as delivery has highly streamlined and
improved the business direction. It helps the retails business owners to keep the track of
everything associated to inventory package and product delivery. With the technical
advancement the business process has become absolutely simpler and efficient (Milgrom and
Tadelis 2018). Artificial Intelligence (AI) is the best way that helps to improve the logistics and
delivery of the business organizations.
Inventory management: The inventory management system of the business
organizations are getting effected through the optimization of the AI algorithm which results the
ability for keeping up the supply as well as demands by reducing the stock depletion as well as
maximization stock levels, prevention of costly facility malfunctions, enhances return in
Investment (ROI).

8INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
Supply chain management: The Supply Chain Management (SCM) system in the retails
industries plays one of the most active roles. In order to provide supply chain visibility,
transparencies as well the chain data processing will become more correlated with the external
predictions. It leverages the big data applications and as a whole the relationship between the
consumers and the service providers will automatically become much stronger.
3. Methodology
3.1 Research philosophy
In order to conduct any research work it is necessary for the researcher to adopt an
accurate research philosophy. There are three different types of research philosophy available
such as positivism, realism and interpretivism. After analyzing the details of the research topic
the most suitable research topic is required to be chosen and applied by the researcher while
conducting the research work (Mackey and Gass 2015). Though, the thinking process for
evaluation of any specific topic, the research philosophy may vary and it is partly dependent on
the researchers thought. The research philosophy should have proper alignment to the research
work. The information set can be designed and outlined accurately with proper alignment. It will
help the researcher to reveal the hidden facts those may help them to design the research work
with an accurate alignment.
The positivism philosophy is dominated by the scientific method which rejects the
metaphysics for knowledge gathering and detail observation of the research topic. Basically for
the complex structures the interpretivism research philosophy are widely used by the researcher.
However, for this specific research work the researcher will choose the positivism philosophy

9INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
(Ledford and Gast 2018). For a better analytical result positivism research approach is referred
to as the most suitable one.
3.2 Research approach
There are two different types of research approaches are there such as inductive and
deductive. In order to realize the importance of innovating Artificial Intelligence (AI) in the
retail industry the most suitable approach among these two should be adopted by the researcher.
The research can be undertaken for two broad areas of study details in terms inductive and
deductive. Whenever enough amount of data are not available only on that time the researcher
should choose the inductive approach on the other data enough information availability will lead
the researcher to adopt the deductive approach to conduct the research work successfully. The
inductive approach delivers the rationale of new theory those have build for the research topic
(Dang and Pheng 2015). On the other hand the deductive approach is used for describe the
applications of the theories those are studied to obtain access to the research content. Deductive
approach can build the theories with more specifications. The behavior of the consumers towards
their desire products are different and based on those specific decisions on research approach is
to be selected by the researcher among deductive and inductive.
3.3 Research design
Three different research designs are there such as descriptive, exploratory and
explanatory and among three of these design the most suitable design should be chosen by the
researcher for successfully conducting the research work. In order to acknowledge different
kinds of ideas and thoughts the explanatory research design is very beneficial. It also describes
the occurrence of different events as well as corresponding effects of the happenings (Lushey
and Munro 2015). For the mere explanation of cause and effect relationship, detail penetrations

10INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
of the research have become absolutely limited. On the other hand, the descriptive research
design helps to obtain details for stating the occurrence of incidents with a detail accurate
explanation.
For this specific research topic that is innovation of Artificial Intelligence (AI) in the
retails industry for retaining the consumers the researcher should adopt the descriptive research
design. For this specific research the explanatory design outline is avoided because it supports
the longitudinal study concept (Lewis 2015). This is not possible for this specific research topic,
thus the descriptive design should be chosen to influence and scrutinize the research details.
3.4 Data collection
The useful information set are referred to as data and from data the most suitable
information are to be extracted by the research during the conduction of the research work. For
deriving proper results from the research work the research process and research format should
be maintained by the researchers.
Primary and secondary are the two different data sources among the either any one or
sometimes both the sources can be used for the successful implementation of the research work
on innovation of Artificial Intelligence (AI) in retails industry to retain customers. The primary
data are gathered through questionnaires and survey and on the other side the secondary data are
composed from secondary sources such as books, journals, blogs etc. Flick (2015) stated that
basically the secondary sources are the literature source that is used for the successful
accomplishment of the research work. Primary data are used for collecting raw data and as per
the need of the research topic those cater data can be gathered. In other words, the secondary
data are used for widening the research topic in more details.

11INNOVATION OF ARTIFICIAL INTELLIGENCE IN RETAIL MARKET
For the specific research topic the researchers have used the concept of secondary data
instead of primary data. For designing this research work the sources those have been nominated
include books, websites, blogs, journals etc. The secondary sources used for the research include
both the offline and online sources.
3.5 Data techniques
The available data techniques are qualitative and quantitative and for this specific
research the researcher have chosen qualitative data. The quality data helps to add the theoretical
concept in the practical application field that leads better understandings for the research work.
On the other hand, quantitative data applies different statistical information those are necessary
for recording data for large sample size (Brynjolfsson Rock and Syverson 2017). More than
quantity, quality should be concern for the researcher and thus the researchers should use
qualitative data techniques for gathering and analyzing information. The research work will be
successfully conducted of proper data techniques are used by the researchers.
3.6 Ethical consideration
For conducting the research work it is necessary for the researcher to consider certain
ethical aspects as well. The researchers require following code of conduct which will definitely
help the researcher to identify the different wrong and right set of information. The ethical
considerations specifically measured for this research are as follows:
Data application: The information obtained from the study of this topic is helpful for
understanding the current trends of Artificial Intelligence (AI) technology in the retail industries
for retaining the existing consumers. In order to understand the impact of innovation in of AI in