Given the extreme challenges buffeting the retail sector, leaders need to rethink their business models as game changing AI-fueled innovation emerges.
Marketers are having to adjust their strategies as consumers shift their shopping behaviors.
For example, HubSpot has reported that nearly 80% of marketing professionals believe their services have changed more in the past three years than the previous 50, with short-form video, influencer marketing, and SEO now the marketing channels of choice.1
Meanwhile, consumers’ brand attitudes are changing, too. Increasingly, super influencers have more sway than even the most admired of brands. Just look at how Taylor Swift ramped up viewing figures for the Super Bowl and increased the female audience share to 48%, simply by attending games and boosting interest in the sport.2
In the midst of all this, retailers must also address macroeconomic and geopolitical instability, supply-chain disruption, increasing competition (both within the sector and from new direct-to-consumer FMCG companies), and more.
Alex VanGestel, VP of Consumer Products at EPAM Systems, a leading digital transformation services and product engineering company, believes that these and other seismic shifts in the retail sector “demand that retail leaders embrace an omnichannel approach, charting new paths to market and finding new ways to serve customers, while also managing costs in the midst of ongoing inflation.”
Meeting consumer needs with AI
Modern AI-powered applications, particularly Generative AI applications, can help retailers address these issues.
Burberry recently explored the possibilities of Generative AI in transforming customer experiences. Concepts included: a digital tailor that uses computer vision to help customers find the perfect size; an AI stylist that could recommend outfits based on customer data, and an immersive catwalk; and an interactive runway that allows viewers to change outfits and models, and access instant purchases.3
Overcoming supply chain challenges
AI-powered applications can also help address operational issues, such as supply chain disruption. Microsoft, for instance, has introduced an AI Copilot to its Dynamics 365 Supply Chain Management solution.
The Copilot enables teams to act on insights that can be accessed through conversational help while in the flow of work. The approach increases productivity and collaboration, and allows users to proactively mitigate disruptions.4
This is just the start. Retailers will be able to leverage AI-powered applications for a large number of use cases including innovative customer experiences (for example intelligent stores, unified commerce, one-to-one personalization, etc.), deriving greater value from data (through unified customer profiles, intelligent fraud prevention, retail media, and more), and building a resilient and sustainable supply chain (for instance through demand planning and optimization, workforce management, and process automation).
For EPAM, one key consideration for retail leaders is to ensure that their AI transformations are built on a unified, secure platform such as Microsoft Azure.
“When retailers set out digitally transforming their IT 20 years ago most ended up using a variety of tools and point solutions that were hard to integrate,” explains Aliaksei Lobko, Senior Manager, Data Analytics Consulting at EPAM Systems. “We are at the start of a new era of transformation, and 20 years from now there will be a vast ecosystem of AI apps and copilots. Retailers should learn from the past and build these on a single unified platform to optimize the use of data across the organization.”
You can also discover how EPAM is driving transformation change for customers in the retail sector.
1HubSpot, “Top Marketing Channels for 2024 [+Data]”, January 2024
2 Sportico, “Taylor Swift Effect Kicks in for Super Bowl as Female Demos Soar,” February 2024