According to new research from BCG and WRC, most retailers are not using long-term solutions like AI to improve their resilience and structural advantage to address their concerns.
Barcelona, Spain, April 25, 2023 /PRNewswire/ — After several turbulent years, the global economy is finally stabilizing. But the world is resettling in a much more difficult way for retailers than it was before the pandemic. Rising costs, declining consumer spending and supply chain instability are our top concerns.
Over 550 senior leaders from 12 retail sectors were surveyed for this report. Amid uncertainty, AI offers retailers a path to resilience, Explore the outlook for retailers in 2023 and how artificial intelligence can provide solutions to their most pressing business concerns. According to the report, retailers surveyed generally agree that economic and operational uncertainty will continue into his 2023, but there are signs of optimism. those who believe the economy is in decline).
Less than 13% of retail leaders surveyed say their organizations are investing in long-term strategies such as AI-powered solutions to address these challenges, most with price increases and marketing campaigns. The focus is on short-term fixes such as implementing
Ian McGarrigleChair of the World Retail Congress.
Retailers are sticking to the basics when dealing with rising commodity costs
In response to rising commodity costs, 55% of respondents said their company was raising consumer prices, and 52% said they were renegotiating with suppliers. Asia A key solution is the cost tracking and control process.
Retailers can leverage AI to create next-generation pricing strategies in several ways.
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Enable geographic and channel-based pricing, dynamic price changes, and personalized offers
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Use machine learning to better understand price elasticity and make price predictions
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Simulate and optimize price changes in different price positions, promotional plans, markdowns and personalization strategies
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Monitor relevant competitors and alternative data sources such as social media in real time to quickly respond to competitor movements and demand signals.
Consumer expectations are changing as spending remains flat
This research AsiaIn recent years, most retailers have ignored AI as a tool to deliver a more personalized shopping experience to overcome declining consumer spending. Instead, the most common approach is:
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Investing in loyalty programs (45%)
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Optimizing product offerings (44%)
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Price promotion (40%)
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Investing in digital customer experience (40%)
A previous BCG study found that consumers were 110% more likely to add items to their shopping cart and 40% more likely to buy more than planned when their shopping experience was highly personalized. It turns out that
Few retailers leverage AI to address supply chain complexity
Nearly half of the retailers who cited supply chain as their top concern are working to improve their inventory management tools. Other retailers are focusing on improving vendor management, improving transportation, and diversifying their supplier base as solutions to supply chain complexity and ongoing volatility.
The opportunity for retailers to incorporate AI into these solutions and their overall supply chain strategy to better understand and address the root causes of volatility from producer to customer is relatively untapped. Combined with the ability to simulate and optimize different scenarios, these AI-enabled insights will allow retailers to be more flexible and predict their needs more accurately in the long term, while at the same time matching supply and demand in the short term. helps to proactively address fluctuations in
How to unlock strategic and financial value
The benefits of AI are compelling, but the prospect of implementing this technology in your business can seem daunting. This report outlines how retailers embarking on their AI journey can address their top concerns and achieve quick wins along the way.
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Identify the challenges your organization faces and how AI can help solve them, creating sustainable benefits.
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Identify use cases that can maximize business value. Focusing on business value allows the entire organization to be involved in AI projects, not just data scientists.
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Prioritize these high-value use cases based on business opportunity, feasibility, and ambition. It’s best to think big and start small to ensure early and quick wins that create momentum for change.
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Build, test, iterate, and scale technology rapidly to have rapid impact across your journey, build capabilities, and transform your organization.
“The new post-pandemic retail environment is more challenging, complex and competitive than before. Tiffany Yeh, BCG Managing Director, partner and co-author of the report. “Most retailers are overlooking the opportunity to adopt AI-powered solutions. The question now is to act today to harness this advantage to propel their business into the future. ”
Download the publication here.
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About World Retail Congress
Established in 2007, World Retail Congress provides an unparalleled high-level forum for senior retailers to learn, share insights, make powerful connections and shape the future of global retail. . World Retail Congress is a global platform that connects retail industry leaders, stakeholders, advisors and influencers to connect, create solutions and drive progress within the industry.
Owner of World Retail Congress William Reeda global media and events business with over 150 years of experience providing marketing-leading analytics, intelligence and events to the food, beverage and hospitality industries.
About Boston Consulting Group
The Boston Consulting Group partners with business and society leaders to tackle their most important challenges and seize their greatest opportunities. BCG was a pioneer in business strategy when he founded it in 1963. Today, we work closely with our clients to adopt transformative approaches aimed at benefiting all stakeholders, helping organizations grow and build sustainable competitive advantages. , empowering them to have a positive impact on society.
Our diverse, global team brings deep industry and functional expertise and a wide range of perspectives to question the status quo and drive change. BCG delivers solutions through cutting-edge management consulting, technology and design, enterprise and digital ventures. We work in a unique model of collaboration across the company and at all levels of our client organization, fueled by our goal of helping our clients thrive and enabling them to make the world a better place.
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