Modern retail is rocket science

AI will be huge in 2024, so don’t let normality bias encourage hesitancy; get planning and experimenting or watch the competition overtake you.

This article in Retail Week has got me thinking. As a business futurist for 26 years, it’s my job to scan for signals of change and right now, all the signs suggest that AI has the power to entirely transform our personal and business futures.

It’s difficult to find words that aren’t horribly clichéd, or boring business-speak when trying to describe how momentous I think the AI revolution is and will be for retail. Humans typically expect the near future to be similar to the past, but at times of exponential change, it’s known that we can suffer cognitive bias that prevents us from adapting fast enough. 2024 will, in my opinion, be the year for using it (AI) or losing it (customer intimacy, operational efficiency and maintenance of margin).

AI has the potential to solve some long-standing issues / thorny problems facing retail. E-commerce is plagued with unsustainable inefficiencies, from carbon-heavy deliveries to loss-making returns. AI can help solve these problems.

Leading retailers are already leveraging AI to optimise costs and drive new revenue streams, especially those that have invested in cloud, analytics and automation and completed previous digital transformation projects,

Californian start-up Pactum has created an AI tool that can handle buyer-vendor negotiations on behalf of large retailers. Perhaps surprisingly, 80% of suppliers were never contacted by actual human buyers. Pactum can negotiate contracts with up to 2,000 suppliers simultaneously, adding 4.2% value to supplier agreements. Three out of four Walmart suppliers said they preferred dealing with the AI system, suggesting that it made their jobs easier.

Consumer demand for conversational AI is already here

Consumers are clearly demonstrating an appetite for using conversational AI tools and integrating them into their everyday lives, from AI coaches for more mindful eating and drinking to AI travel planners and generative AI powered shopping assistants. The comfort with using the technology is already there, it’s just a question of how quickly more retailers can start capitalising on it.

The direction of travel is towards what’s been termed the ‘intimacy economy’, where people have their own AI agents helping them navigate an increasingly complex world. I note that Microsoft has recently launched Copilot, which is intended to boost user’s productivity and creativity across all their 365 apps.

Improving the employee experience for retail workers is only going to become more important.

Retail that’s fit for the 21st century has to be powered by AI. An ageing workforce is going to contribute to demand for good retail sta? outstripping supply even more than is currently the case - so we need to use all the tools available to upskill and retain people and to super-charge them with intimate knowledge of their customer’s needs and preferences. Fortunately, AI can do both.

The future is arriving faster than any of us can imagine.

My advice is: don’t get caught sticking to your normality bias, expecting the next few years to be like the recent past - because they won’t be. Everyone’s on the same journey, learning as they go along. Fortunately, there are some excellent partners and resources out there to help retailers, regardless of their current stage of AI maturity.

Here are some useful resources for further info:

·?????? Building a foundation for AI success: Business strategy

·?????? AI Use Cases for Business Leaders: Realize Value with AImi

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