Americans love to shop—so much so that NPR devoted an episode to it.”Consider this” program on the country's shopping culture during the second year of the pandemic. But while just a few decades ago, shopping meant a trip to the mall, much of the activity has now shifted online.

Personalized shopping is another area that emerging technologies have transformed. Where personal shoppers curated clothes for their customers just a few years ago, artificial intelligence is poised to take over and reinvent our shopping experience.

Related: 5 innovative ways to give your customers the personalized experiences they want

AI technologies in retail personalization

Personalization has been a big theme in fashion retail for decades. WHEREAS personal styling was only available to elites during the 19th century, the advent of personal designers and personal shoppers in department stores put a curated wardrobe within reach of the masses. Today, leading retailers are looking to artificial intelligence and machine learning to take their customers' shopping experience to the next level.

The trend is not limited to fashion. Retailers like Amazon have embraced personalized recommendations since 2010, initially through the “customers who bought” feature. Offering product recommendations wasn't Amazon's first foray into personalization. The company started that trend back in 1999 by allowing customers to save shipping and payment information.

Today, retailers continue to use sophisticated machine learning algorithms to provide personalized recommendations to their customers. The use of AI in retail also includes chatbots that welcome shoppers to an e-commerce website just as a salesperson would have welcomed them to a brick-and-mortar store.

The benefits of AI-driven personalization

Imagine a customer in a department store looking for a small item. Even with the best signposting, they will likely spend considerable time searching before finding that particular item. A knowledgeable salesperson would make things easy.

When it comes to e-commerce, most retailers offer a basic search function on their platform. However, using this search function implies that one knows exactly what one is looking for. If the buyer has only a vague idea, the search can be done once more. A well designed one AI chatbot can shorten that time by offering products that solve a customer's problem without them knowing the exact name of the product.

Looking at fashion, the benefits of AI-driven personalization in retail become even more apparent. The legendary jeans brand Levi Strauss & Co. is working on a project using AI-generated models that would allow customers to see clothes on different body types. The company admitted last year that it was not possible to introduce every single product in a variety of different models. AI may be able to step into the breach.

Other benefits include more accurate forecasting of customer demand and the ability to manage supplies and personnel accordingly. As a result, in-person customers would benefit from limited wait times, while e-commerce customers would rarely, if ever, see the words “out of stock” when placing an order. Personalized retail marketing, incl on social media platformsis already offering more relevant products to customers than standard marketing tactics. AI can take the personalization of retail marketing to the next level.

Related: 3 Revolutionary Ways AI is Transforming E-Commerce

Applying AI in retail

Retailers face similar changes to other businesses when it comes to it implementation of AI. In addition to accessible and affordable technology, they will need to collect data on consumers, choose the most appropriate AI tools for their circumstances, and find ways to integrate AI-based applications with legacy systems.

According to National Retail Federation (NRF)many retailers are interested in harnessing the benefits of AI and are following developments closely. However, they continue to wait and see how the technology develops and what best practices may emerge. Despite the hesitation, there seems little doubt that AI will change retail.

Challenges and considerations

Data privacy concerns and cost of implementation are two of the main barriers currently preventing retailers from more widely embracing AI.

Some NRF members have noted that the cost of implementation remains relatively high, while the benefits may seem logical, but are still unproven and may not provide an acceptable return on investment.

Successful implementation of AI in retail also requires significant amounts of data to train algorithms to deliver meaningful results. Convincing consumers to share their valuable personal information requires high levels of trust. Just as Amazon needed to convince its early customers to store payment information on the new platform, retailers must assure their customers that personal information will not be misused.

As retailers and industry organizations work to build a framework for AI in retail, adoption of these technologies is likely to increase.

Future trends

AI will play a major role in improving customer experiences in various areas of retail. Early adopters like Germany's largest producer of sparkling wines is already using AI to personalize the content shoppers see in its stores. The company is using digital signage to display dynamic promotions for bottles close to the mark and avoid mentioning products that are out of stock.

Related: 3 Reasons AI and in-store teams are a great duo for smoother retail operations

While retailers may differ, many share the same goal – to remove friction from the shopping experience, both in-store and online. Improving interactions and customer service through AI is perhaps part of this development. Like other industries exploring the potential of AI, retailers are not looking to replace people in their stores, but rather to free up staff time for complex tasks.

Whether it's fashion, gadgets, cars, or groceries, Americans love to shop, and we're not alone. Personalizing the shopping experience is one of the keys to capitalizing on that affinity and growing the customer base of any retail business. Artificial intelligence will be one of the driving forces behind the maximization personalization and changing the face of retail as we know it today.