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Michelle Gervais, Vice President of Data Science, CEMEA, Visa

September 2021


3 - 4 minutes

Four Artificial Intelligence trends powering the future of commerce

Breakthrough technologies play a crucial role in shaping the world around us. The world of commerce has seen tectonic technology shifts recently, as retailers rapidly digitized due to the pandemic. Now, retailers are using new technology, which taps into the power of AI and automation, to maintain and grow customer loyalty, build their business and promote their brands. The sector is growing and by 2025, revenue from AI is projected to reach $36.8 billion globally1. Here are four key AI trends that are transforming the commerce sector.

Trend #1: AI ethics and standards in focus

AI technologies are providing increasingly hyper-personalized, seamless and secure omnichannel digital experiences for customers. With the use of big data, brands are now able to study behavioral data and predictive models to accurately anticipate what customers want and when they want it. But there are limitations, as retailers must protect consumer data privacy and security. As AI continues to grow in capability and availability, its ethical implications continue to demand our attention.

Businesses must therefore ensure they have a well-structured risk management model in place, as well as continuous monitoring, to avoid any AI-related issues. In 2019, for example, a popular café chain in India received backlash from its customers for using facial recognition software to bill customers, without their consent2. Since the pandemic, consumers have become more conscious about how their data is used online3. In 2021, retailers must ensure that the use of AI and ethical discussions go hand in hand, and that they have permission from their customers to ensure a successful and secure AI experience.

Trend #2: AI and the seamless online consumer journey

The frequency and severity of cybercrime attacks across the globe rose steeply in 2020, as commerce moved online. At one point during the pandemic, the threat of cyberattacks increased tenfold in just a couple of days according to Visa’s analysis4. AI-powered cybersecurity tools5 can strengthen cybersecurity by identifying patterns and learning to spot fraud, or by preventing unauthorized access by learning to identify unusual or threatening activity.

Data breaches have become so common that we find the best way to approach them is by understanding where the sensitive data sits within your organization, especially if private data is available, so that you can prioritize protecting the most important information. Businesses naturally need to ensure they are complying to specific regulations. These could include, for example, data localization in China, India, Nigeria, and Russia6, which have stipulated requirements on how data is stored and shared. They also need to recognize how critically important it is to tighten security, manage data accordingly and implement the necessary protocols to avoid cyberattacks and ultimately, protect their data and consumers.

Trend #3: AI and cloud technologies become symbiotic

Retailers are now using AI to provide their customers with rich personalized and interactive experiences, by plugging in powerful AI-enabled capabilities. The latest cloud technologies can streamline the model build and deployment processes to accelerate common use-cases. This could mean converting call center voice recordings to written text, creating customer-assistance chatbots, or even using facial recognition capabilities to recognize a customer entering a bricks-and-mortar location. We are likely to witness even more situations where customers are interacting with machine learning algorithms under the hood, as acceptance grows.

Cloud-based AI capabilities and services give retailers powerful tools to engage their customers, but businesses should always be aware that many of these services were first developed using training data from Western and/or Asian markets, which can impact their effectiveness for local customers. For example, pre-programmed facial recognition models tend to be less accurate when identifying African faces, while speech recognition tools often struggle to understand regional accents, local dialects, and meanings. Within Visa, up to 30% of the “dirty data” we see in local markets is due to transliteration problems – Arabic letterforms detected as numbers and special characters when translated into English. There are limitations to a one-size-fits-all AI capability.

Trend #4: Welcoming the Artificial Intelligence of Things (AIoT)

The combination of AI with internet-connected devices (the Internet of Things, or IoT) will allow retailers to gain a huge amount of data from sensors embedded in everyday objects. This will enable them to collect, exchange and analyze a huge amount of information about consumer activity and habits. Brands are launching new smart devices to streamline processes, protect themselves against fraud and personalize customer experiences.

Global retailers in particular are embracing this trend, from the launch of ‘Amazon Go’ to ensure frictionless checkouts7 to Walmart’s AI-enabled security cameras detecting shoplifters attempting to evade self-checkout terminals across more than 1,000 stores8. Birchbox, an omni-channel beauty retailer, uses machine learning to identify and recommend products to customers based on predictions of when customers are likely to purchase an item.9 The combination of near real-time data about customers, combined with the power of AI to analyze and interpret this data, means retailers are able to deliver a new generation of personalized and interactive shopping experiences to customers across many different platforms.

In a digital era, personalized products and services that focus on customer experience can build the loyalty and trust that helps retailers stand out from the competition. AI and automation solutions delivering customized solutions for every shopper will help retailers meet today’s sophisticated consumer demands and drive sales. As a result, businesses can operate more quickly, accurately and can deliver customer experiences that could never have been achieved before.

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1 Three Trends To Keep An Eye On As E-Commerce Continues To Spike, Forbes, November 2020

2 https://www.bbc.com/news/world-asia-india-50499380#:~:text=Indians%20have%20expressed%20concern%20after,to%20bill%20him%20without%20consent

3 https://www.retailwire.com/discussion/whats-next-for-data-privacy/

4 Visa European Narrative Q2 2021

5 https://insidebigdata.com/2021/02/25/ai-in-cybersecurity-six-considerations-for-2021/

6 https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2019/03/GSMA_Understanding-the-impact-of-data-localisation.pdf

7 https://www.amazon.com/b?ie=UTF8&node=16008589011

8 https://iot.eetimes.com/5-applications-of-aiot-in-the-retail-industry/

9 https://digital.hbs.edu/platform-rctom/submission/how-birchbox-stays-competitive-using-machine-learning/

All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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