AI the key to navigating retail compliance fluidly and with agility
= Summary: Ed Betts says retailers must build the agility found in intelligent merchandising to get ahead of regulatory pressure and market fluctuations before it is too late.
Is your retail business future ready? Major political shifts, changes in legislation, economic uncertainty, and the difficulty of convincing cautious customers to spend: it’s a difficult landscape. Changing market dynamics must be met head on if retailers are going to plot a safe route through what lies ahead.
Retailers must react fast to the difficulties and opportunities presented to them while maintaining the flexibility to grow. It is agility which will separate those businesses which can thrive in such a challenging environment and those that can’t.
Real agility means moving away from legacy systems – it requires the development of systems and processes which form a strong business foundation, one which specifically allows for pivots and sidesteps which do not cause seismic repercussions in other areas of the business.
It also means using proven tools, data analysis, and AI to support and streamline operations. With the support of a robust algorithmic platform, retailers can make strong, forward-thinking decisions that are backed up by truth, prediction, and a consistent methodology.
Staying ahead of regulations
Remaining compliant with regulations takes time and effort, and legislation within the grocery and retail space will inevitably continue to expand. New ‘Not for EU’ labelling requirements are coming in October 2024, for example, and the need to adhere to regulations surrounding the sale and advertisement of high fat, salt and sugar (HFSS) products presents an additional hurdle.
The good news is that regulations move at the speed of bureaucracy, whereas retailers can, by making the right choices, demonstrate a far faster pace. Many of retail’s most sluggish processes can be overcome by modernising the processes underpinning them.
This doesn’t just mean streamlining product labelling or the categorisation required to highlight HFSS goods, but also simplifying perennial pain points like shelf-edge displays, promotional price establishment or loyalty card pricing through modern, connected tools and platforms.
Safe, effective promotions
Key retail activities are as important to align as products. Promotions, for example, must be compliant with advertising rules, meet price establishment timeframes, and be fully supported by all links of the chain from supplier to shop floor to media placement. Deals need stock, and they need to fall in line with the rules.
Poor planning leads to last minute changes and less-than-ideal replacements, chosen simply because they are available or applicable. Failure to fulfil a promotion upsets suppliers, erodes customer feeling, and wastes marketing spend.
Worse, a failure to comply with the likes of the Advertising Standards Authority’s CAP and BCAP codes could mean one promotional misstep could open one’s business up to serious and potentially damaging fines or punishments.
For retailers to continue to strive for growth, they must ensure that they are properly aligned in all quarters and departments by unifying data – and, vitally, employing the tools required to extract the truth from it.
Precise plans with flexibility
Joint Business Plans (JBP) are a keystone of supplier activity, but at times plans must change. As opportunities and challenges arise, JBP updates introduce lengthy and complex negotiations into the process. Even tracking the progress of existing arrangements takes time and effort.
Product production cycles make JBPs relatively rigid, but an AI-driven focus adds flexibility and simplicity to the JBP management process. Growth opportunities can be highlighted, some negotiation can be automated, and order volumes can be estimated using tools which know the market intimately.
Algorithmic tools help retailers with the times, not just with the plan. AI-driven tracking not only smooths existing plans, it also spots underperforming or too-expensive products, helping manage the de-listing process in compliance with the Groceries Supply Code of Practice’s strict rules.
Plotting a course to success
Core to all of this is safety. It is one thing to be agile, but quite another to be safely agile. Regulations are designed to keep retailers within safe boundaries – and modern retailing tools feature sturdy guardrails which enable them to move quickly without stepping over the line.
Retailers can move step-by-step, piece-by-piece, upgrading at their pace – but however fast they move, the future of agile retail begins with a strong foundational system powered by AI which can help turn data insights into decisive and effective action.
A future-ready business is one which is not only aware of retail’s changing landscape, but also equipped to navigate it. Those that fail to prepare will be left behind.
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