5 Bleeding-Edge Brands That Are Infusing Retail With Artificial Intelligence

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The next time you're in a Lowe's hardware store don't be surprised if a robot zooms up to ask if anyone needs help. And when you order your morning joe, a programmed bot may be whipping up that venti skim macchiato at Starbucks.

Watch out, folks, the age of artificial-intelligence-powered retail is upon us, promising an unprecedented amount of data and information that can help merchants grow their businesses. Once the stuff of sci-fi novels, AI is poised to juice up everything from customer service to merchandising—except jobs for humans.

"AI is going to be like electricity or the internet—it's going to be foundational technology [for] which most things are built," says Kyle Nel, executive director of Lowe's Innovation Labs. "It becomes so interwoven into robotics and everything. It takes CRM, it takes all of this other stuff that we've been doing for so long and it makes it better than the sum of the parts."

Such data-heavy tactics are particularly intriguing for retailers, who are already using AI in crazy-cool ways that leave other marketers envious. "These are industries that sit on tremendous pools of data about their customers, but [ecommerce] conversion rates sit around 2 to 3 percent—in the physical retail world that would be considered abject failure," explains Jonathan Epstein, CMO of 9-year-old AI player Sentient.

According to market firm Tractica, global revenue from AI will skyrocket from $643.7 million in 2016 to $36.8 billion by 2025. Also by 2025, Forrester expects that cognitive technology—including AI and automation—will replace 7 percent of U.S. jobs.

It's hard to say at this early stage whether Main Street is ready. Adweek commissioned Survata to ask 1,000 consumers how they feel about artificial intelligence. While 74 percent said that they had positive experiences with AI in retail stores, in another question 65 percent stated that they are not cool with a robot replacing a human worker in stores. At the same time, 57 percent said that they would happily exchange messages with an ecommerce merchant's chatbot online.

Regardless, it's no wonder that every technology and software company claims to have AI expertise these days—although definitions vary wildly and it can be hard to pinpoint what exactly AI is. Expect those lines to blur even more in 2017.

"A lot of companies are going to start using the term 'AI' to position themselves differently in the marketplace," says Jeff Malmad, managing director, head of mobile and Life+ at Mindshare North America. "It becomes an opportunity for them to [sound like they] have an advantage over their competition."

Yet legitimate examples do exist—from store-mapping robots to tech that predicts if a dress will be an instant best-seller before it's even designed. Here are a handful of examples of retailers using AI in revolutionary ways.

@laurenjohnson lauren.johnson@adweek.com Lauren Johnson is a senior technology editor for Adweek, where she specializes in covering mobile, social platforms and emerging tech.