The global artificial intelligence (AI) market is expected to top $300 billion by 2026, with retail and banking expected to be the two major sectors driving growth. With the technology maturing so fast, small and medium retailers should be looking at how they can use AI and automation to get ahead of the game and increase their competitiveness.
That’s according to Steven Heilbron, CEO of Capital Connect, a fintech company that offers fast and flexible business funding to South African retailers. He says that AI technologies are becoming more accessible to even smaller retailers, thanks to platforms such as ChatGPT, creating opportunities for agile companies to drive productivity and efficiencies in their businesses.
AI refers to computer systems that emulate the problem-solving and decision-making capabilities of the human brain. This includes technologies that emulate the human ability to decode and categorise images, understand written and spoken words, and identify patterns to create predictive models and anticipate behaviour.
We already interact with AI systems in our day-to-day life via virtual assistants such as Siri or Alexa, recommendation engines on platforms like Netflix, and the sophisticated algorithms that ride hailing platforms like Uber use to plot routes. But whereas it used to take deep technical knowledge, months of time and significant expertise to use AI in a business, the technology is becoming accessible to everyone.
Says Heilbron: “AI is no longer only for corporates and big tech companies that can afford to employ massive teams of cloud engineers and data scientists. We have seen the barriers to entry crumble, with the tools becoming much more user-friendly and affordable. This creates opportunities for SMB retailers to innovate at high speed—enabling them to create better customer experiences and reduce costs.”
Some of the ways SMB retailers can consider using AI include:
Personalised recommendations: Retailers can use AI-powered recommendation engines to personalise product recommendations for ecommerce customers based on their purchase history and browsing behaviour.
Targeted advertising: An application of AI already common in SMBs is the use of machine learning algorithms on platforms like Google and Facebook. These algorithms automate the purchase and placement of ads and help advertisers to target the right message at the right audience.
Creating marketing content: Generative AI tools like ChatGPT can help retailers create engaging social media posts and other marketing content (including text, images, and video) faster.
Chatbots: AI-powered chatbots on ecommerce sites and social media platforms can help SMB retailers to provide customer support around the clock. Chatbots can answer common customer queries, provide product recommendations, and even handle basic transactions.
Inventory management: Predictive analytics and forecasting algorithms can help retailers to better understand demand patterns and adjust their inventory accordingly.
Pricing optimisation: AI can help SMB retailers to optimise their pricing strategies by analysing data on customer behaviour, competitor prices and market trends.
Customer sentiment analysis: Retailers can use AI-powered sentiment analysis tools to monitor social media and review sites for customer feedback.
“Innovative technology and data-driven insights can help retail businesses to grow,” says Heilbron.
“But retailers need quick access to affordable and hassle-free finance to take advantage of the new possibilities to outsmart their competition. With Capital Connect, retailers can apply for opportunity capital of up to R5 million from our app and the funds will be in their bank account within 24 hours or less, so they never miss an opportunity.”