The key internal capabilities needed to ensure a successful digital shopping experience are personalization, automation and the unique identification of the customer across shopping channels. In this report, we discuss how AI and IoT are impacting the retail industry. Retailers that aim to remain competitive cannot afford to ignore the potential benefits of these technologies. AI, a technology that enables computers to make autonomous decisions, is a step forward in automation that is changing the retail industry. Retailers are using AI to analyze customer data, adapt how they interact with shoppers and predict demand in order to better manage inventory. Because consumers are bombarded with an unprecedented amount of information, being able to deliver highly personalized content for each individual customer is crucial to staying ahead of the competition. Meanwhile, the use of AI to anticipate demand and estimate when items will be returned should translate into more efficient business operations. Digitalization is the key that will unlock the future of brick-and-mortar retail, and the IoT is a crucial part of it.
Dynamics 365 Commerce, now in preview, delivers a complete omnichannel solution that unifies back-office, in-store, and digital experiences built on Dynamics 365 Retail capabilities. Retail is one of those industries that everyone can relate to. Shopping is ingrained in our daily lives, with today's consumer demanding engaging and integrated shopping experiences across storefronts–physical stores, online and mobile. As traditional commerce channels are disrupted and new ones emerge, shoppers have ever-greater control of their experience, from researching product price and quality to maximize the value of every dollar spent, to purchasing from the brand that offers the most personalized, convenient service. With this power shift comes a great opportunity for retailers.
In their first guest exclusive with us, Acuvate Software shares the many different ways in which predictive analytics, combined with AI, is changing our industry. Acuvate provides AI and predictive analytics solutions for consumer goods and retail businesses. Their mission is to produce intelligence applications that simplify processes. A retailer can predict the number of footfalls for a given period, but cannot predict where these footfalls are likely to pause in the shop, stop for exploration and for purchase. But, for those retailers who have incorporated predictive analytics and Artificial Intelligence, knowing these gray areas is possible.
Fashion is a glamorous business. British fashion house Burberry recently sparked a massive outcry after burning £28 million of excess stock (as listed in its annual report), continuing a "brand protection" practice associated with other fashion labels like Louis Vuitton and Chanel. Far from protecting Burberry's brand, this backlash could not have come at a worse time for the label. The industry is already under intense scrutiny for years of unethical practices. In addition, fashion houses have to contend with changing tastes and shopping habits.
The retail industry is undergoing a sea change so massive that many industry insiders have termed it the "retail apocalypse." In a sign of this industry upheaval, in 2018 major retailers closed 5,524 stores in the U.S. and 1,432 stores in the U.K., according to figures compiled by the Coresight Research, a firm that studies the retail industry.1 In some good news for the industry, Coresight predicts that 2019 "will not be the year of retail apocalypse or even decline. Instead, it will be a year of reinvention -- for the retail sector as a whole and for physical stores in particular."2 This predicted reinvention of the industry stems in part from the use of sophisticated technology, specifically artificial intelligence.