Symphony RetailAI forecasts a significant transformation for physical stores, a complementary working-alliance between man and machine, and a much-needed reduction in food waste – along with two additional predictions for the roaring 2020s.
1. Physical stores are here to stay but must evolve
While the competition from online retail is not to be underestimated, the next year will see retail continue to play to its strengths – engaging and delighting customers. Stores will offer assortments to tantalise local taste buds and expanding their fresh and prepared food departments. We’ll see live music, cooking classes, and other services transform store visits into experiences to be enjoyed and sustained, rather than dull chores to be completed and expedited.
2. AI will help to optimise promotions
According to the Advertising Association and WARC, the UK retail sector spent £1.25bn on advertising last year, down 1.8% year-on-year. The fight for consumer attention is fierce but faced with increased competition and budget constraints, retailers and suppliers will have to optimise where and how they spend promotional budget. In the 20s, we predict that retailers and supplier will look to tech to ensure that the right customer is targeted at the right time and place. This will include AI to provide prescriptive recommendations about what, where, when, and how to promote items across the store.
3. All eyes will be on inventory levels
Carrying too much stock results in millions of pounds of retail losses each year, while being out of stock can translate to losing a customer. The new decade will bring with it an increased willingness to deploy solutions that enable agility and cost-effective inventory fulfilment. As supply chains continue to become more complex in support of omnichannel retailing, retailers will become hyper-focused on reducing forecasting errors with the help of tech.
4. Food waste will be reduced
A staggering 2.85 million tonnes of food waste is produced in the UK due to supply chain issues. Consumers are more eco-conscious than ever, placing retailers under increased pressure to forecast as accurately as possible in order to reduce the amount of food thrown away. To do this, retailers will have to invest in understanding consumer behaviour and events that affect demand – from traditional factors such as the weather or payday to more emerging indicators like basket size or purchase behaviours. With AI and machine learning, retailers can carry out better analysis of best-by dates on fresh products and purchase data to inform their next order quantity and delivery date in real-time. They will also use algorithms for replenishment to reduce the number of trucks on the road, combining multi-pick and multi-drop practices to prevent half-filled trucks.
5. Artificial Intelligence will help retailers make sense of the data
The Terminator, The Matrix’s Agent Smithand I, Robot have done very little to quell humankind’s suspicion of AI. But the reality is a different one – in retail, it’s not about machines experiencing emotions or taking over the world, but making use of the available data. Try as they might, humans simply cannot normalise, compute, analyse and identify the meaningful trends and outliers as well as computers. AI should be viewed as complementary – not threatening – to the role of human intelligence. Machines will not replace humans in 2020, but with the rise of AI, we will see a shift to retailers learning from the data instead of just trying to figure out what to do with it. The result will be a leap in efficiency for the entire industry.