February 17, 2021 Last updated February 17th, 2021 1,402 Reads share

Machine Learning Is Changing the Way Retailers Do Business

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Machine learning(ML) and artificial intelligence(AI) is revolutionizing the way retail industries conduct business operations. Companies with online sales business models are significantly using machine learning resources to increase sales and cut costs.

“Access to data is a hugely powerful retail tool. It puts the retailer in control because it gives the retailer more information and much more insight into what’s driving customer behavior.”

– Martin Newman, founder, Practicology

We can make a vague estimate as to which industries have altered the most under ML and AI’s influence. Still, we can be sure that the retail sector is most influenced by machine learning because of its online sales business model.  In this article, we are going to discuss the benefits of machine learning in the retail industry.

Use Cases of Machine Learning in Retail

The most important thing for any retail store is to provide the best customer experience so that people would want to visit again. There’s a lot of potentials for machine learning to improve customer experience and boost sales. Below are some of the use cases.

Leveraging Competitor’s Data for Price Optimization

A massive amount of data means much data gets processed through machine learning algorithms used for real-world reaching applications. For example, ML in retail systems allows businesses to track their resellers to ensure that they are not selling their products below the amount of its advertised price, which is not suitable for brand reputation.

With the analysis of the customer’s data, it becomes easier to get a clear view of their assets, and with the help of that, you can determine how much price a customer is willing to pay for a particular product. So you can easily tailor the product at their suitable price or even provide them with the deals that they can’t refuse.

Demand Prediction Using Predictive Analysis

With the help of data, you can provide a truly personalized experience to the customer. Businesses with a lot of inventory need to predict demand to avoid unnecessary wastage of the products. This is why demand prediction is a necessary implementation for such companies or any business in general.

This is just the tip of the iceberg; predictive analysis can even predict the demand and change the prices accordingly to keep the profits in check.

Personalized Offers Using Customer’s Data

“36% of consumers believe that brands should offer more personalization in their marketing”


Mass offers are a thing of the past, and customers are looking for more personalized recommendations catered to them. It is an inhuman task to offer customized offers to everyone. Here comes machine learning in play that studies customer’s behavior, information of their past purchases, social media comments, google search history, and many such parameters. Which cater to what they are looking for and recommend products that are best suited to them.

Predictive Analytics

Predictive analytics is a powerful tool that was unimaginable a few years back. One could only dream of what would develop, what trends could emerge, and how customers will respond to any particular launch with maximum accuracy.

Before ML, trading strategies were built only on random guesses and common sense. Today, thanks to ML and AI, we have enough data that can be processed and built on common sense and a vast array of historical, current, and alleged data. These are some of the main benefits of predictive analytics.

Churn Rate Prediction Using Customer Behavior

When a customer leaves your brand, you lose potential profits from that customer and the amount of money spent attracting that customer through your marketing and other channels. It becomes apparent businesses should never take risks and pay attention to the churn rate. There are always patterns to which machine learning can predict churn rate, and companies could take measures to avoid potential churn. 

It is also five times more expensive to attract new customers than to retain the old ones, So It’s a no brainer how important churn rate prediction is.

Accurate Prediction of Fraud Activities

With machine learning, it’s easier to determine fraud activities like fake coupon selling by tracking the Specific IP addresses. If a fraudster wants to return a counterfeit product, ML can determine such behaviors and alarm the businesses for such activities.

Streamlining Internal Business Using Document Work Automation

Document Work Automation is also an essential part of any organization. Through machine learning, you can analyze internal data like human resource management and other tasks, making employees work more flexibly and increase productivity, eliminating unnecessary tasks, and allowing employees to plan their job and remain inspired.


Machine learning is used in visual merchandising as Customers state that the product’s graphic images play an essential role in buying any particular product. ML in retail businesses provides visual effects to attract more customers.

How Predictive Analytics helps Machine Learning in Retail

As discussed earlier, Machine learning in retail plays a vital role in providing a personalized experience to customers.

Process a Large Amount of Data

Earlier, the companies couldn’t compile data and make anything useful out of it. Now with the help of big data fetching customer data and creating valuable insights has become more comfortable. Businesses make strategic moves based on these data to maintain client relationships, improve the product, and maintain their reputation.

Formulate Elaborate Marketing Strategies

In the last point, we discussed strategies based on big data predictions. Now, similarly, based on market conditions, companies can also make marketing strategies. So that businesses can avoid surprises, evaluate marketing activities with better results, and develop personalized marketing approaches.

Predicts Users’ Behavior for Better Customer Experience

It’s time for the apps to become our secretary, and here, AI and ML will play a significant role. Who are your high-value customers? What are their motivations? Are there any specific patterns to their behavior? Having answers to these questions will help you increase profitability.

Improves Customer Service Using Chatbots

Businesses need to provide the customer with the best customer service; after all, companies’ reputations depend on these factors. Implementation of advanced chatbots trained with ML is taking the market by storm and solving more straightforward customer queries before reaching the service executive. This saves a lot of time for the executives and helps them focus on customers with actual issues.

Overall Boost in Sales

We have discussed many advantages until now, and I think it’s safe to say that all of these examples result in a smoother and better customer experience, which increases sales. 


Every industry wants to increase its sales; that is the ultimate goal; after all, Now implementing machine learning into your operations will help achieve that goal.  Possibilities are infinite with machine learning, and we can say that implementation is reasonably affordable.

While many businesses are already using machine learning for their operations, many still rely on older approaches to these operations. I want to expressly point out the advantages of ML in retail business operations, which decreases a ton of unnecessary tasks for the employees and improves their productivity.

Now that you understand the advantages of machine learning in retail, you need to find a suitable development company that aligns your specific needs and provides you with the solutions for just that. Rapidops provides machine learning services and a specialized team ready to take on any challenge.

Concept of machine learning -DepositPhotos

Himanshu Singh

Himanshu Singh

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