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Retail Doubling Adoption of AI

Retail Doubling Adoption of AI

As the capability matures, it opens up entirely new ways of doing business that can increase operational agility, improve the quality and speed of decision making, and enhance the customer experience.

Adoption of AI-driven intelligent automation in the retail and consumer products industries is projected to leap from 40% of companies today to more than 80% in three years, according to a new study from the IBM Institute for Business Value study, developed in collaboration with the National Retail Federation.

Why the surge in participation?

Intelligent automation represents a major technological breakthrough that has the potential to not just improve, but to transform the way companies do business. In intelligent automation, artificial intelligence (AI) is infused into automation, enabling machines to learn and generate recommendations and to make autonomous decisions and self-remediate over time.

In retail, the highest growth is expected in supply-chain planning (85%). Retailers and brands are initially using intelligent automation to improve efficiency and reduce costs.

Many of the retail executives in the survey are also exploring ways to apply intelligent automation to cross-functional collaboration and interactions with customers. These activities require more complex processes that involve additional system integrations.

This focus is evident in the two areas that show the highest growth in intelligent automation adoption over the next three years: supply chain planning and in-store operations.  Currently, many of the supply chain planning processes including collaborating across multiple functions, such as materials, distribution and transportation planning was done manually. Intelligent automation is ideally suited for this type of environment. AI-powered tools can absorb data from different planning functions, and digest and analyze it quickly. They can then produce calculations to help retailers make near real-time decisions when developing and balancing plans, determining tradeoffs and gaining consensus.

As they work through the process, retailers can use automation to execute repetitive tasks, direct workflows and execute resolutions to exceptions.

Store operations and in-store services can also benefit greatly from intelligent automation. Every city or neighborhood is unique, with its own highly localized flow of people, places and events that shape consumer behavior and demand. Intelligent automation can learn from local data to determine products and services that serve the needs of the neighborhood.

Based on local venue characteristics and available ingredients, it can automate assortment selection for a particular store. AI technology also can apply what it learns to tailor in-store product and service offerings to the individual customer’s needs. Imagine, for example, that you walk into a sporting goods store looking for golfing gear. As you enter the store and opt-in for assistance, the store’s AI-powered app accesses data about your purchasing patterns, interests and preferences. It then automatically assigns you a sales associate who is a competitive golfer.

At the same time, the app provides your information to the sales associate, so he is equipped with pertinent knowledge at her fingertips. He greets you personally, strikes up a relevant conversation while leading you to the golf section of the store, provides product-specific advice based on his golfing expertise and offers recommendations for the right gear

The benefits of AI will continue to expand. “As the capability matures, it opens up entirely new ways of doing business that can increase operational agility, improve the quality and speed of decision making, and enhance the customer experience,” the report says.

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