Does AI hold the secret to retail success with leaner times ahead?
16th May 2022 | 3 min read
Recent macro-economic events have taken their toll on the retail sector, with disruption to supply chains as a result of Brexit and the double blow of the pandemic and Ukraine crisis bringing the threat of global stagflation a step closer. As retailers restructure under the weight of enormous downward pressure, they will be thinking very hard about profitability. The priority of protecting margins and improving operational performance will mean greater reliance on data to gain increased visibility on profit and loss.
Digital transformation and retail insight
The silver lining of Covid, if one exists at all, is that the decisions that were to underpin the digital transformation journeys of retailers were dramatically accelerated. New partnerships were formed, new business models embraced, and new technologies were adopted. But while this led to initial transformative momentum, the manual processes and legacy systems still widely used in retail are under enormous strain and digitalisation has still much further to go.
As in so many other industries, technology, and in particular artificial intelligence, will be instrumental in unlocking real-time insights and removing the burden associated with cumbersome, time-consuming methods of data interpretation and operations management. Successful retailers will be those that quickly deploy effective margin-improvement strategies targeted at the largest cost drivers underpinning the digital switch. For most retailers, these strategies centre around digital marketing, supply chain optimisation and channel-mix management.
Intelligent merchandising: harnessing the power of AI and cloud
Demand for intelligent AI-driven merchandising solutions is increasing, to help retail leaders stay ahead in an increasingly competitive marketplace. Pricing and promotions can now be based on business intelligence and insights derived from data hosted in the cloud, while historic sales data combined with point of sale (POS) data allow retailers to see first-hand what customers are purchasing and when.
The centralisation of all data, processes and planning in the cloud provides ‘one version of the truth’ across the supply chain, accessible to all stakeholders at the same time. This unification speeds up and simplifies processes and facilitates collaboration. For example, two-way supplier collaboration tools bring together retailers and vendors to plan, negotiate and agree deals, track funding and manage media and promotion.
A new dawn: Investing for the future
Analysis of consumer data is key to getting retail right. Retail leaders need to leverage AI to capture deeper insights, anticipate customer needs and proactively deliver across every touchpoint. As we see the growth of disruptors in the retail market, such as online behemoths on one side and the ‘deep discounters’ on the other, it’s essential to invest in systems now that will create a competitive advantage and boost revenue while facilitating a more detailed and data-driven approach to profitability.
Cutting-edge purpose-built merchandising software signals a new dawn for the retail industry, and for those that choose to embrace it, cloud and AI will become powerful allies. With improved forecasting and planning, plus the ability to drive sales and oversee all aspects of supply chain management, intelligent merchandising software holds the key to retail success with leaner times ahead.
To learn more visit: https://www.retailexpress.com/