The real and current opportunities of artificial intelligence in retail
With the UK’s AI Opportunities Action Plan taking shape, Ed Betts addresses some questions about retail AI solutions and why there’s no reason for retailers to wait to begin their AI journey.
1. How can AI turbocharge retail and what are the benefits?
Large Language Models (LLMs) and Generative AI, tools like ChatGPT and DeepSeek, have attracted a lot of press attention. The problem is that the coverage they get only paints half of the picture of AI. Predictive, problem-solving AI, which analyses data to provide insights and enable powerful automations, is arguably more transformative. Ultimately, the three biggest goals of any retailer are driving revenue, increasing profit, and improving customer experience. The insights, optimisations and automations of predictive AI for retail merchandising enable retailers to go beyond what would be possible with entirely manual processes, upgrade their way of doing business, and free key staff to make big-picture decisions.
2. The UK AI announcement suggests a ten-year plan. Does that mean I can wait?
Technology moves faster than legislation. A wait and see approach certainly isn’t the answer, particularly given the interest and innovation we’ve already seen in retail AI solutions. Retailers that wait will lose ground on their competitors as technological advancements continue to grow. No one can be sure exactly how technology will advance. Quantum AI is somewhere down the road, for example. But it’s certain that those who do not act now to start embedding an AI foundation into their systems and processes will lose ground. Against a backdrop of other retailers who are now already powering up their retail AI solutions, the costs to catch up will only become greater over time.
3. Doesn’t it just mean more cost for the retail industry? How will it help my customers?
Yes, there is a cost to get started with all retail AI solutions, as there is with any IT project. But the business cost of failing to adopt an AI strategy, sticking with outdated legacy systems, would dwarf any initial outlay. Typically, AI’s benefits ensure that capital invested by a retailer is returned many times over through improvements in performance and growth. AI can be used to reduce time consuming tasks that add cost, and remove processes that do little to contribute to growth. Perhaps more importantly AI can unlock latent potential through identification of opportunities, optimise activities and enable the business to focus its energies on tasks that deliver growth to both the top and the bottom line. And for customers, they gain access to the best prices, promotions, and experience you can offer them.
4. AI is seen as a negative for people. Will a rise in AI mean fewer jobs in retail?
The way that people work is changing, and will change further, as a result of further innovation in AI. That might feel unsettling but, far from being a jobs saboteur, AI should be seen as an enabler. Retailers can work smarter by exploiting the power of AI-assisted retail merchandising to help in areas such as price promotion, or promo planning which takes everything into account. By streamlining time consuming, labour intensive and (crucially) error prone tasks, much of retail’s minutiae is essentially taken care of – and humans can do the creative, boundary-pushing things they’re good at.
5. Does AI mean an expensive rip and replace of IT infrastructure?
The process does not have to be so disruptive. It’s about preparation and consideration, first adopting an AI mindset which embraces the benefits that AI can bring to a retailer’s operations, then executing on a plan that embeds AI into the infrastructure of the business. Whether a retailer decides to introduce a full AI merchandising solution that touches all parts of its business or introduces it one bit at a time, there are options that can help manage the delivery and the budget according to their specific requirements and needs. Regardless of the approach, AI-enabled retail practices provide a significant ROI that far outweigh the costs.
6. Is AI only suitable for large retailers?
AI’s abilities are based on data. The more data an AI platform is offered, the more effective it becomes – meaning retail AI solutions are most suited to medium to large retailers where large pools of data and economies of scale can be utilised to unlock large scale benefits. A small retailer operating from a single store or a very small number of stores may not be able to invest enough data to make the AI components of today’s retail management software effective, but for any mid-sized retailer of around 40 or more stores, the benefits can be significant.
7. Is it too late for me to get started and how do I do that?
It’s never too late to be thinking about retail solutions and reaping the benefits of innovative systems that introduce analytics and automation! Some will argue that the future of retail depends on it. The right time is always right now. Just by asking that question you’ve taken the first key step in embracing AI as a future driver for your business. If you need help understanding the ways that AI could transform your operations, drive growth, and transform your customer experience, get in touch with us at Retail Express and we’ll help you take the next step.
