I was really looking to find something different to do this afternoon other than reading research papers and AI-related books. So I decided to go to the nearest bookstore and browse through some books. The mall that I decided to go to had two key franchises of bookstores. I browsed through the books for almost one hour in one of them and really enjoyed doing that. They had a good collection. I really liked the experience because I was physically in a bookstore, in an actual brick-and-mortar bookstore, after more than a decade. I was also lucky enough to find a few good books, including a collection of short stories from Ruskin Bond, that I once owned as a child in my boarding school (though it was in the form of a graphic novel and the collection was not this vast).

During the time I spent in the bookstore, I realized that while people did come to browse books, very few of them actually ended up making any purchase at all. In today’s age of e-commerce, this behavior makes sense. Unless you are a book lover who likes to be surprised by a book that you were not actively looking for, and you love the experience of reading an actual book while being away from a digital device, there is no business buying books from these specialty stores by visiting them in person.

As I picked my books, I was sure that if I tried looking for these books on Flipkart or Amazon, chances are that they would be cheaper on these websites. I did validate my assumption once I came back to my hotel and found the assumption to be true.

Obviously, this specialty bookstore also has an online portal where you can order books online, but a quick comparison here revealed that many of their products are actually priced a little bit higher than those on competing e-commerce sites like Amazon and Flipkart. After all, these big e-commerce sites do not have to worry too much about margins. But the thought that came across my mind, considering the minimal foot traffic that I observed and the number of staff that I saw in the store, was how commercially viable these stores are in today’s age? I would be really interested to get my hands on some data on the revenue that these stores make versus their operating cost.

While on weekends the foot traffic may be more, based on what it was this evening, I do not see the traffic being significantly higher. In fact, at any point of time, there were more employees in the store than customers.

One may question if this brick-and-mortar model of bookstores is still relevant? One reason these stores need to have brick-and-mortar outlets, in my opinion, is to keep their brand identity out there, the view of the public.

A couple of decades ago, when e-commerce wasn’t even present in India, these brands were the only recognizable names when it came to buying books in the metro. Now under the shadow of the intense competition that they face from multinational e-commerce companies, they know that they cannot complete. The brick and mortar business model of books obviously did not stand a chance against these online companies. But these bookstores are not exactly bookstores that sell textbooks. They sell a wide genre of books, and the assortment of these books changes frequently. Think about these stores as being bookstore equivalent of Zara. Just like fast fashion, you will find that the assortment of this books changes every few months in majority of aisles.

What this means is that these bookstores are not for shoppers who have a specific book in mind. The bookstore shapes their mind through the assortment displayed in the bookstore, coupled with the reading interest of the person browsing those aisles.

But in the age where even those who used to browse these physical bookstores do not want to take the pain of going to crowded malls, what can these bookstores do to keep tapping that customer segment? This is where technology can help.

The customer segment that frequents these stores is genuinely interested in reading and is willing to be surprised and delighted to find a book that they believe they will love reading. If your website is like every other e-commerce website, listing books, and primarily banking on customer to browse or search for specific books, it may not work. Your customer segment, who used to visit your physical outlets will not go through the pain of browsing through hundreds of pages to find what they would like to read.

There are two ways technology can help these companies, specifically AI-based algorithms. The first approach is focused on enhancing the online experience and leverages technologies that are currently mature. The second approach focuses on in-store experience and leverages mature as well as emerging technologies. Let us explore both of these approaches.

Leveraging deep reinforcement learning and recommendation engines, you can replicate some of the unique experiences that your customer segment wants when they visit your online store. Note that when a customer is visiting your online portal, they have probably already made-up their mind to not visit your physical store. But they have decided to visit your website versus going to Amazons and Flipcarts of the world. This indicates that they like your business model, like the assortment, and are not looking for a specific book but are looking basically for a recommendation on books they would love to read.

When we are browsing in the store, we are making recommendations to ourselves. And if we have questions on these recommendations (in our mind) we may ask the store associate for their help. While the statement that we make recommendations to ourselves may seem a bit weird, that is exactly the thought process we follow. We target specific genres when we enter the store, which is the initial recommendation that our brain has given us in terms of what we like. Then we pick up books, flip through the pages, read the text on the jacket, to gain a gist of whether we will like the book or not.

If we think we will like a book, we shortlist it, even though we are not sure we are going to buy the book. As we walk through the process of how we let our brains make recommendations, you can see how recommendation engines coupled with deep reinforcement learning can help capture the same process digitally, based on an initial questionnaire that a customer fills when they sign up online.

Obviously, the design of this questionnaire is critical but once you capture the data, you can provide that same powerful experience for shoppers who are looking to do their shopping entirely online. Obviously, you will have to make changes to the user interface, too, for example, to replicate the book-flipping experience. While this specific example is for a bookstore, it can be extrapolated to a wide variety of retail.

The next approach is focused on in-store experience.

This experience also relies on getting an initial data term from the customer. This can be obtained by luring them with a free membership card that provides them discounts. Now let us say that I, as a customer, provided the data they needed by filling out their questionnaire. They gave me a smart chip-enabled membership card that I need to carry with me if I want to visit the store and avail of the discount.

As I enter the store, I receive a text message on my phone welcoming me to the store and providing me a map of the store that highlights areas that have my genre of interest. This approach serves many purposes. First, if the customer has a specific genre or topic in mind, they can just text back to that number or engage with an AI-based chatbot that they can access through their membership app. Tapping into the inventory data and layout of the books in the store, the chatbot not only suggests which sections to visit but also provides a summary of the books it is recommending. Additional interesting insights about those books may be added to the conversation to spark additional interest.

There is another additional perspective to it that leverages the emerging technology of augmented reality. When you visit the store and are greeted through that text message, you are provided an option to collect an augmented reality glass from one of the store associates. Through a quick entry in the system, the store associate is able to link the glasses with your specific account. So rather than opening a map that you receive in the text, these AR-enabled glasses highlight areas and shelves as you walk through the store, popping up book covers and reading out summaries and highlights.

These are just few examples. The fact is, as one industry disrupts another, AI can always help companies being disrupted to take on the challenger and change the rules of the game.