The capabilities of artificial intelligence (AI) for retailers of all different shapes and sizes has undeniably grown across many sectors in recent years. In today’s world, retailers are beginning to develop a legitimate recognition of what it takes to properly appraise, develop and generate AI and ML-enabled solutions of the future, moving past the marketing outbreak that AI once was.
Moreover, despite the developments that have been contrived, some retailers have not yet acknowledged the true possibilities of AI and what this entails. It is these retailers that need to question themselves: what do we want to accomplish with AI? What can AI really deliver – and what will this mean for our customers?
The Power of AI
The opportunities to leverage AI and ML to improve retail operations are exponential for either online, in store or in the warehouse. However, before AI can be truly powerful in the sector, the hurdles of data quality and quantity must be addressed.
Even with the magnitude of data currently captured by many retailers, they repeatedly struggle with capturing and retaining enough of the ‘better stuff’ – historical data that is factual, complete and textual – to take full advantage of the benefits AI can put forward. This data is fundamental to make AI and ML models the best they can be. In the rush to grasp innovation, it is easy to overlook the challenges presented and move focus away from the essential objectives, which should be: where is the ROI, and what is the implication for the customer experience?
Take, for example, a great AI solution in store that gathers information about a customer – such as hair colour, size, and style – to recommend new products, from hair-styling to make-up, fashion to accessories. This could be extremely enticing for customers, especially due to the pandemic, as it allows for minimal contact and social distancing.
With the future of various high street stores remaining questionable, getting the customer experience right at every opportunity – which means encouraging repeated visits – is critical. In today’s highly competitive retail landscape, ridden by challenges from Covid-19, consumers continue to face seismic hurdles with both offline and digital worlds. Therefore, it’s crucial to understand the key benefits that new technology will bring, including the customer experience implications.
Today, customers will seek different retailers within the overloaded omni-channel marketplace if products can be delivered efficiently as well as being at a lower price elsewhere. Strong customer experience and satisfaction are not achieved through technology gimmicks, but through ensuring technology can help customers quickly get their hands on the products they are searching for before it’s too late.
In practice, this means ensuring maximum stock availability where it is needed, at the correct time, and at the right location. It means achieving a slick warehouse and distribution centre operation that can deliver both to the store and to the consumer’s front door whilst adhering to social distancing requirements. AI solutions will add positive value when this structure is in place.
Change is good
Retailers that have utilised AI in the warehouse are already driving tangible developments in efficiency and accuracy. By combining high-quality order history data with AI and ML to greater grasp the aspects of purchasing trends, including direct to consumer ecommerce orders, retailers can reconsider operations. Schedules can be re-organised and resources rearranged, while orders can be seamlessly prioritised and new delivery choices enabled.
In addition, AI enables retailers to better manage changing sales peaks such as the back to school rush or a sudden April heatwave. The huge rise in ecommerce orders experienced when stores closed their doors last year, indicates how retailers need to be well prepared if a new peak suddenly emerges.
With the help of AI, retailers can take advantage of accurate and granular predictions that can be utilised to smooth out the entire logistics process and efficiently respond to challenges in real-time. With innovation at the core of AI, retailers of all types and sizes can use the myriad of AI and ML opportunities to level the playing field with giant retailers.
AI is taking retail by storm, however, putting the gimmicks aside, the real and attainable value of AI currently is to be gained by applying proven algorithms to drive fundamental supply chain developments.
Find out more about Digital Transformation Week North America, taking place on November 9-10 2021, a virtual event and conference exploring advanced DTX strategies for a ‘digital everything’ world.