Retail has always took advantage of new technology. From neon signs to cash registers to the shopping cart with wheels, technology has continually made it easier for consumers to shop and for store owners to sell.
Now comes yet another advancement that’s already changing the retail landscape: Machine Learning. In fact, some experts feel machine learning will have a similar impact on retail as the industrial revolution did on manufacturing.
For those unfamiliar with the concept, according to one definition, “Machine learning is a type of artificial intelligence that provides computers with the ability to learn without being explicitly programmed. Machine learning focuses on the development of computer programs that can teach themselves to grow and change when exposed to new data.”
Not only is the idea straight out of a 1950s science fiction novel, the term itself literally says what it is. With machine learning, technology improves as it collects more data and feedback, which has enormous potential for retail organizations.
Retailers can now identify business priorities that would otherwise be buried in sea of possibilities. They can make sense of data with a level of speed and accuracy that would be impossible for mere humans. They can be smarter about planning based on future scenarios and market conditions.
These critical tasks can now be performed because machine learning allows retailers to make sense of truckloads of data. Let’s face it – today retailers can access an immense amount of data about sales, products, availability, logistics, consumer behavior, the list goes on and on. But with so many numbers in an endless stream of columns and categories, no single person (or even team of people) can squeeze the maximum amount of learning from that data.
Machine learning lets you clearly identify the under- and over-performing areas of the retail operation. In turn, companies can take immediate and precise action to boost the performance of all areas of their business.
The best benefit, however, may be a retailer’s newfound ability to see into the future. Machine learning allows retailers to test scenarios and forecast results. They can conduct experiments around sales, promotions, holiday and seasonal offerings, and virtually any other scenario that affects the bottom line.
Retailers who haven’t yet investigated this new technology would be wise to do so. To be sure, economic, social, and legislative forces will always have an impact on both sides of the checkout counter. But modern technology has the biggest influence on how retailers sell and how customers behave. Machine learning is already suggesting people you may know on Facebook. Let that same concept suggest how to increase profits.