One year after every industry dove headfirst into GenAI hype, retail market gurus have surfaced with a boatload of tech-related ways that retailers will deploy to cut through market volatility and competitive threats, delivering intelligence that powers personalized customer experiences and solid business results. This is a quick round-up of the latest retail industry trends and predictions that revolve around increasingly intelligent merchandising, digital commerce, personalized marketing, and supply chain resilience.
Retail leaders showcase innovation at NRF
Last year ended with strong retail sales.
CNN said Americans spent a record-setting $222 billion this past holiday season.
The National Retail Federation (NRF) reported that a record 200.4 million consumers shopped over the five-day holiday weekend from Thanksgiving Day through Cyber Monday.
SAP was among the many innovators rubbing shoulders with the world’s most influential brands at NRF’s flagship tradeshow in New York City this week.
“In a market where customers have so many choices, retailers are turning to advanced technologies like GenAI to anticipate consumer needs and deliver profitably on the company promise every single time,” said Jorge Koesters, global head of retail marketing at SAP.
“We have embedded Business AI capabilities directly into our portfolio, combining that with SAP’s industry expertise to provide retailers with a new kind of intelligence for growth that is built on the bedrock of enterprise data.
Retailers can unlock the power of data and insights to make better decisions about demand planning, store replenishment, and order management that build customer trust and loyalty as well as business profits.”
Understanding the GenAI competitive edge
In one Gartner webinar, researchers explained what makes GenAI so powerful for any industry.
They said that the technology “enables a probabilistic capability to identify a next word or phrase that is more likely to accurately represent customer intent.”
They identified four focus areas for the retail industry’s use of AI: marketing and digital commerce, customer experience, operations/supply chain, and merchandising/planning.
GenAI transforms the customer experience
According to IDC analysts, order tracking for improved customer services is one of the common ways retailers can put GenAI to work for major customer experience improvements and business results.
Intelligent bots can more efficiently provide order status updates via phone, chat, and social media in 80% of situations without human support.
Brought into stores, AI and machine learning-based tools can bring up data that helps employees become more effective in personalizing customer recommendations and offers, increasing satisfaction and loyalty.
All these improvements reduce costs and give people more time to manage higher level responsibilities such as innovations for market growth.
IDC researchers expect that through 2027, 95% of retailers will test/invest in GenAI to enhance product data, customer support, and customer experience initiatives.
By 2028, they predict 50% of retailers will offer AI-enabled contextualized recommendations to enhance customer engagement, increasing real-time interactions by 30% and overall conversion rates by 20%.
Bolstered by data intelligence, these analysts envision store associates becoming “a trusted advisor and partner for the customer.”
Sustainable retail wins the race
GenAI-driven growth in the retail industry depends on responsible, ethical, and accurate use of the technology.
Amidst the GenAI excitement, Forrester analysts sounded a note of caution for retailers, citing errors and hallucinations that could lead to accidental discounts and misinformation in live chats.
They advised retailers to have “significant human oversight” in GenAI-based customer interactions.
Across all industries, Gartner researchers predicted that by 2026, enterprises that apply TRiSM (trust, risk, security management) controls to AI applications will increase decision making accuracy by eliminating 80% of faulty and illegitimate information.
Relevant, accurate intelligence is just as important to sustainable business from an environmental perspective.
“GenAI can help retailers manage their carbon footprint more effectively across the supply chain because it prompts retail professionals to ask the right questions to get the answers they need,” said Koesters.
We’re bringing GenAI into our cloud-based sustainability solutions to help retailers manage their carbon footprint, reduce material waste, and report on how they’re meeting socially responsible commitments.
One example is transport optimization for better planning that reduces emissions and builds supply chain resilience.”
IDC analysts said that by 2028, 55% of grocery supply chains will deploy intelligent IoT to track the condition of perishables, reducing food waste by 25% and inventories by 15% and improving quality by 40%.
Retailers gird for next era of intelligent digital commerce
A little over a year after GenAI made its splashy debut, retail first-movers are moving ahead.
Connected quality data has become more important, allowing retailers to quickly extract and use AI-driven insights at the right points in time.
Whether interacting with customers, making omnichannel fulfillment and assortment decisions, or creating forecasts to outperform competitors with resilient and sustainable supply chains, retailers are making GenAI investments that will revolutionize their future.
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