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Riding the AI wave in retail: Takeaways from NRF 2022

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By Topics | Analytics
Industries | Retail

The waves of disruption just keep coming. Retailers have learned to make rapid pivots to catch and surf the big ones – but how are they doing with AI? NRF this year explored what it means to ride the AI wave in retail. We invited experts from Microsoft, Sitoo and SAS to reflect on a number of contributing factors during a Twitter chat. The full SASchat is here, but here are my top takeaways.

There are 2 main areas for intelligent decisioning in retail

The first is customer engagement and personalisation. For example, at NRF, we heard from Melissa Berscheid about Ulta Beauty’s use of intelligent decisioning in real time to deliver a personalised guest experience. The second area is stock management, which of course affects customer experience because having to wait for a stock check is frustrating. 

Analytics enables retailers to forecast stock levels more accurately

At NRF, John Furner, President and CEO of Walmart US, said, “We’re in a rapidly growing economy with a high demand level, which has led to out-of-stocks, supply chain problems and price increases." Analytics enables increased accuracy of stock forecasting by drawing on more information to provide insights into customer behaviour. 

Analytics is essential to respond to short-term uncertainty

Analytics may be especially useful in enabling retailers to respond rapidly and effectively to volatility in demand and purchasing patterns. We saw this, for example, at the start of the COVID-19 pandemic, when people responded to changes in their lifestyles by buying different products.

As inflation hits, analytics will help retailers respond rapidly to changing demand

Inflation is likely to have a major impact on the retail sector in 2022, affecting both costs and prices. Analytics will enable retailers to stay ahead of the curve by modelling changes in demand and supply to reflect price changes. This is likely to be critical to the effective management of stock levels. 

Retailers have access to huge amounts of data – but trouble joining it up

Best Buy CEO Corie Barry described data as the currency of the future. She noted that retailers have access to a huge amount of rich data about how to inspire and support customers. However, customer journey optimisation is still very much a "work in progress," perhaps because retailers struggle to join up data except in a few specific use cases.

It may never be possible to fully ‘complete’ customer journey optimisation

It is possible to argue that many retailers still struggle to understand their customers. However, there is also an argument that both markets and customer behaviour are in a constant state of flux. In an ever-changing world, can anything ever be said to be fully optimised, with no further work needed?

Digital is often still an afterthought and not a connected part of the retail experience

Many retailers have not fully grasped that the customer journey seldom starts at the store now. Digital is an integral part of the experience, but it is also often not fully integrated. Retailers need to connect the dots to achieve customer journey optimisation.

It would be possible to integrate online and ‘brick and mortar’ stores much more

It is not just customer journeys that would benefit from closer integration between online and brick-and-mortar stores. Stores may also become fulfilment centres for online shopping with the rise of click and collect. This means that store location is an increasingly important issue – and could benefit from analytical input.

Culture change may be needed to increase use of analytics in retail

There may be a cultural barrier to accepting the use of analytics to improve the understanding of customers. Retailers need to change their culture to recognise the importance of both knowing their customers and understanding their behaviour, including the motivation behind it. This will enable them to build their stock to address customer demand.

Technology will continue to help us re-imagine retail

We often think of change in the context of what is available or mainstream today. New technology-driven possibilities have, and will, continue to disrupt.

The key to improving retail resilience may be curation driven by analytical insights

Many retailers, especially in fashion, are struggling to keep up with insights into customer behaviour. They may not recognise the seismic shifts in the industry that mean key influencers are now on social media, not in fashion houses. However, retailers can build resilience by understanding customers first, and then using those insights to build their offer, including collections. This curation will provide a stronger ability to respond to changing markets or customer demand.

Discover how to apply analytics to every step of the customer journey for better connections and deeper insights. Drive your product demand planning, inventory and supply chain using real-time customer data thanks to retail analytics and consumer goods analytics from SAS.

Tags #SASchat NRF
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About Author

Antonio Calvo

Industrial engineer from Catalonian Politecnical University UPC and MBA from IESE. With more than 20 years experience in international companies in EMEA in the Retail and CPG. I'm passionate about working closely with customers and executives in solving complex business problems, leveraging customer insights out of Big Data, advanced analytics and AI to provide and increased accuracy in strategic and operational recommendations and decisions. Large experience in developing and implementing projects in international companies from retail and CPG. Currently leading the business development for Retail and CPG industry in South EMEA region.

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