COVID panic, flu lockdowns, destroy Black Friday store visits, emphasize online urgency
The transition to online commerce has been stunning as COVID-19 panic and government shutdowns have altered retailing forever, but new-artificial intelligence technologies are emerging to help retailers make the transition.
AI seems like a big leap for small businesses and retailers, but AI capability is becoming a requirement to compete in a digital world, and this holiday season has made the urgency abundantly clear.
E-commerce platform BigCommerce reports record-breaking Cyber Week sales with an approximate 74% increase in year-over-year gross merchandise volume on its e-commerce platform, led by an approximate 86% increase on Sunday after Thanksgiving.
The National Retail Federation reported for the first time that the number of online Black Friday shoppers passed the 100 million mark, up 8% from last year, and the number of online Saturday shoppers was up 17% for the period. Those who only shopped online increased by 44% for the weekend, to 95.7 million.

The bigger story for retailers is Black Friday in-store shopping dropped 37% compared to last year, NRF reported, and Thanksgiving Day in-store sales declined 55% over last year. Although 70% of holiday shoppers said they felt safe in stores, the impact of the COVID-19 pandemic on store visits is apparent.
More and more companies are rapidly seeking technology support, especially AI-enabled solutions from robots to help consumers find and buy products.
Simultaneously, Amazon has been investing heavily in AI to engage customers, enhance product assortments, sell products, and manage its supply chain. It has been hiring 2,800 workers daily since July, according to LinkedIn News, and now employs more than 1.2 million people globally. Most are warehouse workers – and the tally doesn’t include delivery drivers.
As Amazon’s one-click-buying patent is expiring, the leviathan is quickly adding to its AI arsenal to boost competitive advantage, raising the bar for all retailers. The new retail landscape is dotted with AI to track activities, sense patterns, predict needs using both structured and unstructured data, and automate processes to serve and sell customers in many dimensions.
Amazon reportedly is filing numerous machine learning and AI-focused patents to maintain its competitive advantage in these areas as more big retailers implement new shopping technologies.
Most big retailers are pursuing a grand vision of personalized online experiences powered by AI. Small retailers who don’t provide some level of e-commerce continue to lose a key channel of customer engagement and sales, and they face a continuing challenge as online customer engagement becomes more sophisticated.
AI-enabled features such as virtual shopping assistants, personalization, and selection preferences are quickly becoming expectations. Personalized, friendly, and effective robots will be the shopping connection for most e-commerce, both in text and natural language.
The trends are driving new technology and software-as-a-service (SaaS) companies to fill in the e-commerce gaps for smaller retailers who want to scale up service but scale down investment.
Yi Zhang, chief technology officer and co-founder of Rulai, in a TotalRetail webinar on deploying AI-powered virtual assistants, explained how AI SaaS programs may help retailers enhance their websites and e-commerce channels with latest AI technologies.
Rulai is an AI company based in Sunnyvale, Calif., with offices in Beijing, China – which signals that country’s investment and commitment to AI technologies. Yi spoke to how the company has identified several levels of buyer-journey interactions that are incorporated into the software to help companies pilot virtual-assistant implementation without massive and expensive back-end integration.
Yi offers several tiers of capability, starting with a monthly plan of about $1,000 that connects to a retailer’s e-commerce system after a pricy set up fee.
The main goal of an AI virtual assistant is to replicate the in-store experience Yi said. She said the technology provides a series of questions to customers and responds contextually with text to provide product knowledge and recommendations, plus upsell and cross-sell.
The Rulai platform uses AI and machine learning so the virtual assistant can work with customers who don’t know what they want and engage them with recommendations and product selection leading to conversion. AI and machine-learning tools also collect data and provide analytics.
Yi claims virtual assistants have doubled sales in some cases and increased customer satisfaction 80%, while decreasing retailer costs by as much as 70%.
Retailers would have to ensure human backup for operations and fulfillment on such a platform and to intervene for special cases that aren’t or can’t be mapped in the buyer-journey setup.
The advantage of a SaaS strategy to pilot an AI-enabled virtual assistant is the lowered investment risk, Yi said. Retailers can segment a small test to try out the system and get it up and running within a week.
Some companies have spent millions of dollars trying to set up an AI-enabled virtual assistant system and failed, which is why companies should start small, Yi said. She said big projects often fail because companies try to solve multiple problems that add complexity and require more hand-written coding.
Also, the more complicated and the larger the organization, the more internal corporate resources are involved, such as special teams, inter-departmental coordination, plus other factors that raise costs and don’t always solve the problems of engaging customers and coordinating the backend response and sales fulfillment.
Most retail applications have been in the realms of data capture and analytics, with some implementation of robotics and transactions.
Yi said starting small helps implement common retail tasks and addresses universal presale processes, such as guided product selection, gathering customer feedback, product recommendations to increase conversions, and product-knowledge answers that build trust and lead to sales.
Retail AI Trends
Current retail AI is mostly about data capture, analytics, and inventory improvements. With Amazon’s increasing research and investment in artificial intelligence, expect more retail technology applications.
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