AI can assist every aspect of retail operations.
Retailers will obtain maximum value from artificial intelligence (AI) implementations when they approach them strategically.
I recently attended the Coresight Research NextGen Commerce AI conference in New York City. A wide variety of speakers from retailers, technology providers, academic institutions, and consulting firms spoke about many different aspects of how AI can improve the way retailers conduct their operations.
One common thread that ran through all the presentations was the need for retailers to ensure AI investments fit into their business strategies in order to ensure they obtain maximum return in cost and time savings.
Following are three ways retailers can strategically deploy AI technology:
Do the same thing, but better
One aspect of successful AI implementations that numerous speakers stressed is that they fit AI technology into a retailer’s existing processes and workflows. Retailers should not look to AI to create new jobs or activities, but to make what they already do more efficient, accurate or cost-effective.
In addition, AI implementations should not be viewed as a means of reducing headcount. While the result of an AI deployment may include a reduction in staff, in many cases AI deployment will simply enable existing employees to perform their tasks better, or take on additional responsibilities without increasing their overall workload.
I have been covering the retail tech space for approximately 25 years, and from the very beginning have always focused my articles on implementations that are driven by business need, rather than hasty deployments of the “latest and greatest” solutions in fear of falling behind. This rule very much still applies to AI – your enterprise would almost certainly benefit from it, but only if it’s rolled out in a considered and strategic fashion.
Forecast with greater accuracy and speed
Leveraging AI, retailers can build sophisticated, targeted demand forecasts on the fly with near-real-time data from a disparate set our sources. In addition to tracking traditional demand signals, retailers can apply next-generation AI technology to gather and analyze data such as social media commentary, granular demographics of different markets and even stores, and current weather conditions to generate highly specialized and time-sensitive predictions of what products are needed in what locations, and at what times.
Equipped with this type of detailed information, retailers can better avoid inventory issues such as over- and under-stocks, and even generate the type of forecasts that enable supply chain activities such as just-in-time shipping, which eliminate the need to hold inventory.
Meet your shoppers’ lifestyle needs
AI is also an invaluable tool for retailers to get more personalized in their customer interactions than ever before. While retailers currently utilize AI to deliver shoppers targeted promotions and recommendations based on purchase history or even what’s currently in their cart, next-generation AI solutions can enable them to individualize offers based on much deeper lifestyle factors.
These include not just a shopper’s preferred brand, but their favored product attributes. Depending on your specific retail vertical, these can encompass factors such as color, pack size, flavor, or any number of other variables.
In addition, modern AI solutions can help retailers fill a broad need, rather than simply purchase one product for one purpose. For example, a grocer could go beyond selling a customer with school-aged children a package of snack cookies to selling that customer every item they need to pack their kids’ lunches for a week, including items like napkins and straws as well as food and beverage products.