Implementing AI solutions in brick-and-mortar retail is naturally more challenging than online retail, yet taking a step back, both are still surprisingly only in early stages. According to a 2018 study by Capgemini, over a quarter of the top 250 global retailers are integrating AI into their organizations (a sharp increase from 2016, when it was only a small minority of 4 percent). However, the study also found that only 1 percent of AI initiatives reach full-scale deployment. This is about to change. According to McKinsey Global Institute, investments by retail and CPG in artificial intelligence are expected to exceed $8 billion by 2024.
Thanks to the COVID-19 pandemic, 2020 was a year in which consumers learned to do many things in a contactless manner and shopping was no exception. Retail industry has had the most crucial decision-making months during the pandemic, especially on their ability to predict the future. Retailers today are facing lots of concerns. These include how to increase sales, improve sell-through and profitability. Certain forward-thinking retailers are beginning to understand that from here on, no year will be like the one before. And as a result, to answer those questions, retailers are adopting technology to their advantage.
Can data, analytics, and artificial intelligence save the supply chain? It's a question that corporate boards may be asking their CIOs. After all, technology came to the rescue helping many organizations address the challenges brought by the COVID-19 pandemic such as remote work and online commerce. But problems with the supply chain remain a lingering and painful reminder of how upside-down the world still is, even as office workers trickle back to their pre-COVID routines a few days a week. Ships continue to be stacked up off the coast of Los Angeles.
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.
Today's retailers have to find profitable strategies to deliver on their customers' expectations, amid significant fulfillment challenges and complexities. Customers don't understand the massive omnichannel fulfillment operation that is set into motion when they click "Buy Now." Whether they purchase a product on your e-commerce site for home delivery or order a product to be delivered to your nearest brick and mortar location, customers want immediate inventory availability, fast shipping and a seamless end-to-end purchasing experience. Here's a closer look at how AI and cognitive technologies are helping improve omnichannel fulfillment in a world of rising customer expectations, free 2-day delivery from the competition, and rapidly shrinking margins. What does intelligent fulfillment look like?