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NEW YORK — It sounds like a science fiction plot: machines and computers operating with intelligent and human-like behavior. But artificial intelligence (AI) is real and relevant to any task involving the intellect, and AI applications affect nearly all aspects of modern human life.
In industry, AI is so ubiquitous that it often goes unnoticed, as many of its innovations and techniques have become mainstream — known as the “AI effect.”
AI is not simply about robotics or automation. Robots can carry out difficult or repetitive tasks, but they do not all have AI capabilities. Common examples of AI include drones and driverless cars. But AI is also being used to advance health care by helping to diagnose disease, such as finding the right cure for cancer by assisting doctors in sifting through enormous amounts of data to pinpoint the exact necessary treatment.
Banks and financial institutions also use AI to organize operations, maintain book-keeping, invest, and reduce fraud and financial crimes by monitoring behavioral patterns of users for any abnormal changes or anomalies. AI is also used to create art, prove mathematical theorems, play games, and run search engines and online assistants, as well as for image recognition in photos and spam filtering, among many other uses.
Yet AI, too, is being applied in the broader retail sector, and these applications can be implemented by drug store retailers as well, according to Fung Global Retail & Technology (FGRT), a global research and analysis firm for organizations navigating the intersection of retail, technology and fashion.
FGRT has identified three main applications of AI in retail, including the drug store retail segment: personalization, customer service and inventory management.
With personalization, AI can help retailers provide individualized service to each customer through tailored communications, shopping recommendations, e-commerce and m-commerce portals, and promotions. For instance, drug store retailers send online customers emails that contain offers, promotions and discounts that are similar to those sent by retailers in other segments. These emails are usually tailored to include products that customers may be interested in based on their shopping and browsing history on the retailer’s website and on their in-store purchase history.
One example, FGRT says, is CVS Pharmacy, which sends personalized emails to customers enrolled in its ExtraCare loyalty program. CVS creates the personalized emails based on an analysis of customer behavior from a test group versus those from a control group. This method, also known as A/B testing, involves investigating hypotheses by emailing deals and offers to customers who have similar profiles and assessing key performance indicators, such as conversion rate and basket size.
If CVS used AI instead, the company could further leverage the data that it collects and get better results, according to the Harvard Business Review.
In terms of customer service, AI is also used to run chatbots that mimic interactions with human customer care and sales staff. Most chatbots tend to autonomously resolve customer queries and direct more difficult queries to human staff after asking customers a series of questions designed to assess the complexity of their issue. AI can help here, according to FGRT, because drug store pharmacies may not always have adequate staff to answer all patient or customer queries.
And with inventory management, AI-powered data analytics can help retailers predict which customers are likely to buy in the near future. This can enable retailers to maximize the probability of having the right items in stock as customers order them, which results in faster fulfillment and leaner inventory operations.
FGRT says that although AI has become part of the mainstream, the technology still has a long way to go before it becomes conventional to use across all industries.
