The key to success for any retail organization lies in understanding its customers, products, supply chain operations and changing market trends and demands.
“In the past, gaining insights from your data required you to access and collect unstructured data, clean and organize it, then have a highly trained professional run and interpret statistical analysis and pass this on to the user for further interpretation of the insights,” says Rajagopalan. “This process is proprietary. It requires resources and also causes businesses to be constrained by the quality of data, capabilities and tools they have.
“We see too many retail and consumer goods organizations making do with the insights they have, which often consist of simple regression, retrospective analysis, and limited data mining. In short, static reporting that delivers static insights.”
This type of data analysis is no longer enough for retail organizations struggling with fluctuating market changes, supply chain disruptions and customers seeking more streamlined shopping experiences. To stay ahead of the game, retailers need to be able to predict the future more accurately than before.
create innovation
Innovations like generative and predictive AI are driving a technology revolution in the retail and consumer goods industry, enabling organizations to deliver solutions that provide smarter, easier ways for customers to shop and for employees to run business. Generative AI also allows retailers to better understand their data and gain meaningful insights into their business operations.
“Generative AI provides the ability to unlock insights from new sources or unstructured data that has long been dark for the organization and access it using just natural language,” says Rajagopalan.
“Imagine, for example, the wealth of customer insights hidden in customer service call logs. You can find out what customers like and dislike about products, why they break down, what else they would like to see; “This is all forward-looking, open-ended information.”
Domino’s Pizza is one retailer in the UK and Ireland using AI to better understand its customers. The organization uses Microsoft Dynamics 365 Finance and Operations’ Demand Planning feature, which uses artificial intelligence to predict customer order trends without the need for hundreds of spreadsheets and with a forecast accuracy of 97.5 percent. This means Domino’s Pizza can better plan their supply chain, resulting in less waste and a smaller carbon footprint.
Retailers can also use AI to create new experiences for customers and enhance the shopping journey.
“People want to find, not just search,” says Rajagopalan. “Businesses must implement advanced search functions and rethink interactions, personalization, product catalog tagging and matching.
“A customer visits an online store and asks ‘what should I wear to my cousin’s wedding this spring?’ “If someone asks a question like this, they get personalized recommendations, while the business better understands the customer’s needs and preferences.”
French retailer Carrefour, which operates a chain of convenience stores and convenience stores, is one organization taking this approach to adopting artificial intelligence. The firm used Microsoft’s OpenAI Azure service to develop Hopla, a chatbot integrated into the Carrefour website that allows customers to ask for help choosing products based on their budget, dietary restrictions and meal plan ideas.
This adds a conversational element to the shopping experience that will not only retain customers but also attract new ones.
“We often view marketing as a ‘one-way’ communication between a brand and consumers, where the brand addresses the world and hopes its messages will stick,” says Rajagopalan. “Generative AI now enables brands and shoppers to speak in natural language and create personalized content. “For example, a brand can now create three different versions of the same marketing campaign, but change the language used in each to better meet the needs of different audience demographics.”
Making the adoption process easier
Despite growing use cases, there are still many retail organizations that are cautious about adopting generative AI due to concerns about security, potential job cuts, and more. But there are steps they can take to reduce the risks.
Incorporating AI into business operations doesn’t have to be a complicated process, says Rajagopalan, noting that there are a range of solutions and resources that can help.
“An increasing number of software-as-a-service applications are shipping with generative AI features built-in,” she says. “This is a great way for businesses to see the benefits of generative AI and learn how to use and optimize it without having to take on the burden of building, governing and maintaining their own software.”
The Microsoft partner ecosystem is also working in this space to bring AI-powered solutions to retail organizations. At NRF 2024, which will take place on 14-16 January 2024 in New York, USA, firms including Blue Yonder, Fractal, Fashable and Sitecore will be at the Microsoft booth highlighting uses cases for the generative AI solutions they have built.
Taking the leap
The impact of AI on businesses is expected to continue growing in the future. According to a market research report published by Fortune Business Insights in June 2023, the market value of AI in retail is expected to grow by 34.1 per cent by 2030, reaching $55.5 billion.
For organizations that are taking a ‘wait and see approach’ to Generative AI, the time to act may come sooner than later as, according to Rajagopalan, “soon, everyone will be using generative AI in their personal lives, and it will be harder “To avoid employees and customers demanding it in work and personal life.”
Partner perspectives
We asked a selection of Microsoft partners how they are using Microsoft technology and AI to help retail and consumer goods clients improve supply chain management, in-store operations and customer engagement.
“Avalara Dynamics 365 integrations allow retailers to optimize supply chain efficiency, streamline in-store operations and elevate customer engagement,” said George Trantas, senior director of global marketplaces at Avalara. “The seamless data synchronization enables informed decision-making by automating compliance and tax processes to mitigate risks, which allows businesses to focus on core operations.”
“First movers among enterprises are leveraging generative AI to automate repetitive tasks, offer superior customer service backed by generative AI and produce high-quality content that resonates with their target audience,” said Ramana Raju Nidadavolu, manager of go-to-market for Microsoft Practice at Infosys.
“Powerful new AI-driven analytics tools that are easy to implement will drive productivity and efficiencies using Microsoft Teams,” said Hilary Oliver, chief marketing and experience officer at Tollring. “For instance, Tollring is soon launching AI-driven analytics of Teams call recordings to automate the detection of keywords and subject topics, helping people to find and analyze the conversations that matter.”