In the face of global events and shifting consumer behaviors, retailers are navigating uncertainties by turning to the potential of artificial intelligence (AI) to reshape the future of their industry. The year 2024 brings forth pressing questions for businesses: How can sales be increased without raising overhead costs? How can year-round stability be achieved for sourcing, inventory, restocking, and order management? Furthermore, how can retailers foster strong omnichannel brand connections in a competitive market where customer loyalty is increasingly linked to values like sustainability?
Amid these challenges, AI emerges as a game-changer, offering operational efficiencies and enabling hyper-personalized, real-time, omnichannel customer experiences. Far from being bleak, the future of retail holds promise for those who embrace AI technologies.
AI is poised to elevate the retail landscape, providing retailers with the tools to boost sales and strengthen brand connections. The adoption of AI is becoming crucial as consumers seek brands that align with their values and deliver seamless experiences that seamlessly integrate into their online and real-life lifestyles.
At SAP, the implementation of business AI is geared towards helping companies optimize processes, enhance profitability, and cultivate customer loyalty. Wondering how AI can address these challenges for retailers? Let’s explore some of the hurdles we’re helping retailers overcome at NRF ’24.
Driving Profitability with AI-powered Operations
Effective product discovery is pivotal for driving sales. Poor product discovery often results from the complexity of managing product catalogs, leading to inaccuracies, subpar recommendations, and reduced conversion rates. AI offers a solution by streamlining product catalog management, enhancing data accuracy, and providing a more personalized shopping experience.
SAP’s CX AI Toolkit, a single Generative AI layer, utilizes data from across SAP products to address catalog management challenges:
AI Product Tagging: The toolkit automatically analyzes catalog images and text to tag products, ensuring accurate categorization and labeling, reducing errors.
AI Product Descriptions: By leveraging AI, the toolkit generates personalized and compelling product descriptions, enhancing the customer experience and driving informed purchasing decisions.
Bulk Editing: Efficient bulk editing of product tags and descriptions enables quick updates to large catalogs, freeing catalog managers for more valuable tasks.
Optimizing Operations with AI-Informed Logistics
Efficiently managing inventory and sourcing is essential for getting products to customers at the right time and cost. Challenges such as cost-to-ship, delivery timelines, and capacity management can impede efficiency. AI, integrated into SAP Order Management Services, addresses these challenges by tailoring sourcing strategies based on Key Performance Indicators (KPIs).
By considering KPIs like cost-to-ship, delivery timelines, and pick-and-pack expenses, retailers can determine the most effective sourcing strategy. The integration of AI allows the simulation of single orders based on these strategies, optimizing the return process and proactively managing orders.
In conclusion, the integration of AI into retail operations offers a transformative path forward. By addressing key challenges, retailers can enhance profitability, deliver exceptional customer experiences, and build brand connections that resonate with the values of today’s discerning consumers.