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[ INSIGHT ] Adopt or Fail: Why Business Needs AI

Strained supply chains: nearly half of shoppers harbour negative thoughts towards retailers that fail to keep products in stock. Consumers have become quick to call out… View Article

RETAIL SOLUTIONS

[ INSIGHT ] Adopt or Fail: Why Business Needs AI

Strained supply chains: nearly half of shoppers harbour negative thoughts towards retailers that fail to keep products in stock.

Consumers have become quick to call out slow and unreliable supply chains, with 45% admitting to getting angry about low stock levels. This is according to global eCommerce consultancy Wunderman Thompson Commerce’s latest Adopt or Fail Why businesses need AI report, launched in conjunction with Satalia.

Supply chain issues were even more pronounced during seasonal peak periods such as Black Friday, where 45% say their online orders took too long to arrive and 63% have been left frustrated that their products did not arrive in the time quoted. Overall, nearly a third (32%) of shoppers feel that parcels are not being delivered quickly enough. Retailers must now find a way to relieve the elevated pressure, answering the need for convenience and speed post-COVID-19. Not only is this something that artificial intelligence (AI) can typically help with, but the majority of shoppers (59%) crave personalised deals and discounts.

What’s more, with fuel prices at an all-time high, now is the time for retailers to look to optimise their logistics processes so they can offer a better end cost to their consumer – and, according to our report, route and inventory optimisation will be a crucial part of this, with 36% of business leaders confirming this is a point of friction that AI could help improve.

And while the adoption of AI is high, 77% of business leaders consider themselves to have implemented some form of AI, 90% acknowledge that their current implementation could be more effective. 71% who haven’t implemented AI yet go on to say that they would be more likely to consider using it if they knew more about its use cases; 45% haven’t due to a lack of skills. Crucially, an overwhelming 87% that have invested in AI solutions think they have been able to contribute positively to the outcomes of the business. With speed of decision-making cited as being the biggest benefit, 37% of business leaders say it has enabled quicker decision-making – hinting that there is more to come from AI in the retail sector.

Daniel Hulme, CEO, Satalia and Chief AI Officer, WPP added: Logistics is under threat from multiple directions; driver shortages, soaring fuel prices, vehicle and part supply scarcity, as well as increasing pressure to reduce carbon impact are all increasing the pressure on business owners. Only a well-orchestrated AI solution can help retailers to navigate these challenges effectively. For businesses already feeling the pinch post-pandemic, and with consumer demands evolving at a rate of knots, making a savvy technologicial investment now can mean the difference between thriving and surviving in the digital age.

Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce said: “We’ve all seen the impact of chip shortages, supply chain disruption caused by geopolitical events and rising consumer demand on retailers. Margins are now tighter and the gap between success and failure is much smaller now, financially and reputationally. This is where AI can have a transformational impact in the world of retail.

“AI can enable better decision-making, faster data processing and improved online & in-store experiences; more importantly, it can bridge the gap between increasing consumer demands that have developed over the pandemic. It’s no longer OK to leave shoppers exasperated by slow website load times and unreliable delivery. It’s high time to go from concept to reality, from the ideal of personalised Black Friday deals to offers that are based on what shoppers want. AI is no longer a niche technology but something that organisations need, and consumers now expect retailers to have built into their services by design.”

Download the full report here.

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