To say that the COVID-19 pandemic has disrupted the retail industry would be a huge understatement. From changes in the way consumers shop to coping with lockdowns, retailers both big and small have faced incredible challenges as a result of this pandemic.
And as we continue to move through the pandemic, and positive signs continue to crop up as vaccination rates climb, retailers are now taking a close look at how they will integrate the key learnings they have received throughout this pandemic and further optimize their operations both during the pandemic and beyond. This has led many retailers to look into ways that they could embrace next-level technology as a way to bolster their current capabilities. Enter sophisticated technologies such as data science — and, most importantly, AI.
Here are three ways that AI is already being implemented to help retailers cope with the challenges of COVID’s new normal.
1. Answering Solving Supply Chain Challenges
Sourcing and manufacturing have been among the biggest challenges retailers have had to overcome throughout the pandemic. From product shortages to issues in production due to lockdown conditions, retailers have been forced to cope with one of the most hectic periods ever when it comes to product sourcing over the last year. And retailers are beginning to scrutinize their current sourcing and manufacturing operations and look for ways to optimize their infrastructure so that it is in a better position to cope with similar circumstances in the future.
Requiring seemingly endless hours of manual effort, analyzing and reporting on sourcing and manufacturing operations has long been one of the biggest pain points for retailers today. Moreover, once all of this manual legwork is conducted, the insights gathered are often outdated. Therefore, sourcing and manufacturing management has been in need of a drastic overhaul for a very long-time, and AI is helping retailers do just that.
Through AI, retailers have been able to become much more agile when faced with sourcing disruptions — enabling them to gather, process and act on data in a much shorter period of time then they previously were able to. Additionally, because of AIs automation capabilities, retailers can run “what if” scenarios much more accurately to better prepare for periods of disruption in the future.
2. Understanding the Consumer
The customer journey has been one of the most heavily impacted aspects of retail during the COVID pandemic with customer shopping habits and desires rapidly evolving and diverging from what they were pre-pandemic. This has made understanding customers and the customer journey much more complex for retailers as a result.
Building a customer profile is a very challenging prospect to begin with. However, with AI, retailers have been able to un-silo their data and make it work collaboratively and autonomously.
This has resulted in far less legwork for retailers and has allowed them to get a better sense of each consumer’s preferences and past experiences which in turn can help retailers deliver better communications and deals to their customers.
3. Empowering the Customer Experience
Given the amount of new technologies and strategies that retailers have been forced to embrace as a result of the pandemic — including contactless pick-up and expanded digital-first shopping methods such as chatbots — retail is likely going to look much different after the pandemic than it did before it. This means that retailers will need to embrace a much greater level of technological innovation in order to continue facilitating many of the new offerings they have rolled out to consumers after the pandemic.
With the help of AI, retailers are able to make their customer service offerings much more savvy. For example, through improvements in language processing and voice recognition retailers can offer much more intuitive experiences via chatbots and smart speakers.
Furthermore, AI also allows retailers to make their backend operations much more dynamic as well — enabling them to better manage inventory and tweak pricing so that customers always receive the best possible experience.
Retail has been center stage for much of the COVID-19 pandemic. Yet, for all of the challenges that have arisen, there are still a host of opportunities that have presented themselves for retailers when it comes to rethinking their operations, customer experience and more.
Bhaskar Roy is a client partner at Fractal Analytics.