With the 2024 peak season on the horizon, retailers are intensifying their efforts to leverage technology and innovative fulfillment solutions to boost revenue and enhance customer experience.
Point 1:
If 2023 was the year of AI hype, 2024 will be the year of AI evolution.
Retailers are exploring new opportunities inherent in artificial intelligence (AI) with over half of respondents using AI or looking into it for their operations.
In fact, more than four out of five retail executives report that their companies are using AI and plan to enhance their use in five functional areas:
Inventory management, such as forecasting demand, managing inventory levels and optimizing the allocation of stock across different locations
Customer service, including chatbots and virtual assistants providing real-time support to customers in tracking shipments and answering queries
Risk management and fraud detection, through activities like detecting anomalies in shipping patterns and identifying potential fraudulent activities
Predictive analytics for returns that include analyzing historical data to predict potential returns and enabling proactive measures to streamline the returns process
Customized shipping solutions, including tailoring options based on individual customer preferences
As one of the Retail Dive survey respondents said, “With the advent of new technologies such as artificial intelligence, blockchain and the Internet of Things, logistics companies need to invest in integrating these technologies into their operations to improve efficiency and remain competitive.”
While retailers are eager to reap the benefits of AI, there is work to be done, finds a recent survey from market research firm First Insight, which concluded: “The strategic disconnect discovered between retail CEOs and their management teams points to a severe knowledge gap within enterprise-level retailers that will impede future growth and profitability. CEOs and their teams will need to transform their organizations into more agile, data-driven businesses by leveraging AI’s vast potential not simply to cut costs, but also to
win at innovation.”
Point 2:
Retailers will increasingly deploy technology to enhance forecasting.
Given current fluctuating consumer consumption, predicting inventory demand continues to be difficult without real-time visibility and accompanying data. And yet, those insights are critical to success: The more accurately brands can predict inventory and order accordingly, the better they will be able to control costs and navigate economic headwinds.
This realization came through in the survey results, with retailers saying they plan to bolster their forecasting capabilities to more thoroughly anticipate product demand and stay ahead of market trends. Most retailers currently have and plan to enhance AI capabilities for inventory, customer service, risk management/fraud protection and predictive analytics for returns.
Investing in advance data analytics tools (25%) and implementing ML algorithms for predictive modeling (21%) are two other top ways retail executives say their companies plan to enhance their forecasting capabilities.
“These real-time insights, combined with historical data, can help inform brands on purchasing behaviors that allow them to match supply with demand, thereby eliminating stock-outs, surpluses—and surprises,” says Matt Barr, Vice President of Marketing for Radial.
Point 3:
Retailers seek new ways to mitigate challenges in their fulfillment processes.
“Partnering with a 3PL is a strategic advantage, as we can offload the challenge of order processing speed and accuracy, assisting brands with the entire cycle from click-to-delivery,” Barr explains. “When brands entrust operations to a dependable 3PL partner, they can focus on other challenges while the 3PL does what it does best—deploying fulfilment strategies that align with the brand’s goals.”
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