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Jan 15, 20245 mins
Artificial IntelligenceGenerative AIIT Strategy
Retailers will be offered AI-powered tools for prediction and promotion at the National Retail Federation’s annual show.
As they take stock after the year-end frenzy of shopping the holiday season always brings, retail CIOs attending the National Retail Federation’s annual show, NRF 2024, may be wondering how they can improve their IT systems’ performance over the next 12 months. If software vendors have their way, the answer is likely to involve more artificial intelligence.
Sales statistics
Two recent surveys concur that only a tiny minority of retailers have no plans to implement AI today. One, conducted by Salesforce, found fewer than 3% of commerce organizations have no AI plans, while 29% have already fully implemented it into their workflows. The other, by Nvidia, looked more specifically at generative AI, and found that 98% plan to invest in it.
Nvidia also found that among those already using AI, 69% believed it had contributed to an increase in their annual revenue. For some, the increases were dramatic — 15% of respondents reported more than 15%, and a further 28% reported increases between 5% and 15%.
That still leaves 26% of respondents willing to credit their revenue increase to AI use — even though it was less than 5% at a time when, according to the NRF, retail revenue across the US increased by an average of 3.7% year on year in the first 11 months of 2023, AI or no AI.
But 2023’s rate of consumer spending growth is not necessarily sustainable in 2024, the NRF’s chief economist warned, so retailers may need all the help they can get.
Beyond boosting revenue, respondents gave plenty of other reasons to adopt AI in retail, including creating operational efficiencies (53% of respondents), improving the consumer experience (42%), improving decision making (37%), or yielding more accurate demand forecasting (21%).
SAP draws on AI for new predictive capabilities
SAP is targeting the desire for better demand forecasting with new composable tools being announced at NRF 2024. It’s using AI to simplify stock replenishment and order management in physical and online stores. Such capabilities are part of its Industry Cloud family of products, and can be integrated with any ERP system, not just SAP’s.
In its Predictive Demand Planning solution, SAP is using a self-learning model to provide longer-range forecasts, alert users to the root causes of forecast changes, and make recommendations.
SAP will also progressively extend its existing Predictive Replenishment tool to store level. It already offers recommendations for replenishment scheduling at the distribution center level. SAP keeps a human in the loop here: If business users are happy with the system’s recommendations, they can easily transfer them to the procurement system to automate the creation of purchase orders.
Improving the consumer experience is Microsoft’s target as ahead of NRF, it released new generative AI capabilities for retail, including a new Copilot template to help online retailers personalize the shopping experience for their customers. It has another Copilot template to help physical retail stores build digital assistants to answer questions from staff about their products, policies, and procedures.
Its Dynamics 365 Customer Insights marketing analytics tool is also getting a generative AI makeover, with a new Copilot to help staff build and manage marketing campaigns.
Mojix introduces generative AI tool to explore retail data
Maiven is an AI-powered tool from Mojix intended to help retailers improve decision making by improving access to supply chain data. It uses Google Cloud’s Vertex AI machine learning platform to power a natural language chat interface that enables retail staff to explore inventory information. It can report on incidents such as stock outages and shortages, measure their economic impact, and recommend ways to better manage inventory at store level or across the supply chain.
Sensormatic tackles loss prevention
CIOs will be more used to preventing data loss, but Sensormatic wants to get them involved in preventing shrinkage, or inventory loss, often through theft. Its SaaS-based Shrink Analyzer application uses a combination of RFID tags, computer vision linked to in-store CCTV, and analytics to help retailers identify causes of loss.
On a more positive note, it’s using AI-powered computer vision analysis to power Store Guest Behaviors, a tool to optimize store layouts through heat map analysis.
Commercetools is unveiling Foundry, a new suite of “precomposed” composable components for cart-to-checkout ecommerce. It offers online retailers blueprints based on how its other customers have put successful systems together, and uses AI to help developers combine the right components faster, and says it’s possible to go live in as little as eight weeks.
Amazon primes Salesforce customers for more online sales
For some customers, “free shipping” can be more persuasive than personalized recommendations or AI-adapted sales copy. Salesforce and Amazon are doing some cross-promotion with Amazon’s “Buy with Prime” integration for Salesforce Commerce Cloud. This will enable merchants to offer their customers free shipping with Amazon Prime through their own Salesforce-powered online storefronts, and syncing orders and promotions data between Amazon and Salesforce.
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