Three Use Cases To Maximize the Potential of AI in 2024

By Michael Osborne, CEO, Appriss Retail

It doesn’t take a crystal ball to know AI will be a major player in 2024. In fact, 87% of retailers have already integrated the technology into at least one area of their businesses. However, the top use cases for AI in 2024 might not be what you’d expect.

In 2023, chatbots and generative AI were all the rage. Next year, the focus will be on how AI improves productivity and profitability in ways that are more specific to the needs of individual retailers. Looking ahead at 2024, I foresee the top three AI investment areas will be loss prevention, employee support and management, and returns optimization.

In 2022, shrink, as a percentage of total sales, cost retailers $112.1 billion in losses, according to a report by Appriss Retail and NRF. This proves why retailers need to invest in AI-driven loss prevention tools to lessen the negative financial impacts of theft and fraud. For example, Appriss Retail empowered a UK-based gaming and entertainment retailer to reduce revenue erosion by over one million dollars with AI-driven loss prevention.

Unfortunately, shrink will only get worse until retailers effectively utilize AI-driven exception-based reporting to identify theft and fraud before it impacts profits. The report from Appriss Retail and NRF found that retailers believe organized retail crime, external theft, and internal theft are all more of a priority now than they were a year ago.

With strikes and labor shortages continuing, retailers must learn how to support and bolster their existing team members. Fortunately, retailers can turn to AI to monitor employee behavior and recommend individualized rewards for top performers and training opportunities for those that are struggling. For instance, if a cashier is consistently ringing up items incorrectly, they may need to be re-trained to avoid stocking mishaps and lost profits. On the flip side, retailers can use AI to create rewards programs that incentive employees to go above and beyond.

Case in point, Appriss Retail recently supported a regional department store as they identifed deviances in employee conduct. As a result, the retailer flagged 25% more actionable cases, generating thousands of dollars in value.

Finally, retailers must optimize the point of return in 2024. In 2022, for every $1 billion in sales, the average retailer incurred $165 million in merchandise returns. It’s important that businesses discover new ways to save-the-sale, including AI-driven personalized incentives designed to encourage shoppers to make a new purchase after their return is finalized.

This strategy helped a leading automotive aftermarket parts provider increase purchases after in-store returns by 22%, improving profits and shopper loyalty.

In just a few years, retailers will likely rely on AI to optimize every step of the retail experience. But now, it’s important to focus on the use cases that will deliver the best ROI today. Whether it’s in loss prevention, employee support and management, or returns optimization, retailers that implement AI will be reaping the benefits in 2024 and beyond.