Utilising AI in a post-Covid-19 world

Craig Summers, Managing Director at Manhattan Associates, encourages retailers to leverage AI to its greatest potential – from the beginning stages at the warehouse to the end result at stores – in order to deliver a joined-up customer experience that is right every time.

Artificial Intelligence (AI) has undeniably grown for retailers of all shapes and sizes across many sectors. 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 contrived developments, 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 – especially as research estimates that retailers will spend US$15.3bn on AI by 2025, $8bn more than initially projected by the end of next year. However, before AI can be truly powerful in the sector, data quality and quantity hurdles must be addressed initially.

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 a 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?

In practice

Take, for example, a great  AI solution in-store that gathers information about a customer – such as hair colour/type and skin tone, size and style – to recommend new products, from hair styling to make-up, fashion to accessories. This would be extremely enticing for customers, especially due to the pandemic with minimal contact and social distancing. However, unless every suggestion made by the solution is easily accessible for customers to buy in-store at that very moment, or if not, easily sourced and delivered to the customer’s destination of choice, using AI in this way helps contribute to a  satisfying customer experience that is enduring and profitable on the bottom line. 

Future goals

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 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 fulfil 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 deep, 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 the pick, pack and ship operations. Schedules are being re-organised and resources rearranged, while orders can be seamlessly prioritised and new delivery choices enabled. 

In addition, AI enables retailers to better manage the changing sales peaks: for example 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. 

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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, to help neutralise and compete – but also to differentiate. Retailers have also shown in the past how they can embrace innovation, adapt to a challenge and adopt the technology available – and there has never been a better time for them to achieve this. 

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.

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