You are a leading retailer and you are out of stock of a particular popular item in store or online. A delay in suggesting the best substitute to your customer can cost you the customer. It is that simple. No business can afford this in the prevailing competitive business environment.
Loyal relationships with the customers are really important. Your customer retention can boost your revenue as well as increase the customer’s lifetime value.
Amidst the pandemic online shopping for everyday needs increased exponentially which also led to a significant jump in sales almost everywhere in the world. According to the United Nations Conference on Trade and Development (UNCTAD), fueled by Covid-19 overall global e-commerce sales jumped to $26.7 trillion in 2019. Nonetheless this boom wasn’t without challenges.
Walmart, like many other retailers, faced a unique challenge in the pandemic. As the pressure grew following quick online sell out, the challenge was how to help its customers and personal shoppers choose the best substitute for an out-of-stock item–without wasting time.
The business solution Walmart came with was smart and efficient. And it helped both, online and in-store sales. The solution helped the retailer increase its customer acceptance of substitutions to a whopping over 95%. Amazing, indeed.
So how did Walmart do that? The retail industry giant went for a technology solution–leveraging Artificial Intelligence (AI). The AI-powered system today helps Walmart to identify the next best item for its customers if an item of interest is out of stock.
In order to determine and suggest the best next available item, Walmart’s deep learning AI considers hundreds of variables from size, type and price of its products to aggregate shopper data, individual customer preference and current inventory etc – in real time.
And this system isn’t just limited to performing this task only. The AI-fueled system uses customers’ feedback for its learning algorithms which helps Walmart improve the accuracy of its future recommendations for its customers.