Artificial intelligence (AI) may be the next big thing, yet most retailers wait on the sidelines, watching what other businesses reap from this new digital technology.
It’s not that they don’t want to pursue this new technology. Working in low-margin businesses, retailers understand the value of a technology that can promote significant organizational change and drive revenues higher – especially in a sector where business processes are still mostly manual.
If only it were that simple to jump right into the AI pool.
Collecting High-Quality Data is a Challenge
Retailers of all sizes are keen to put AI to work in their businesses. However, digital transformation projects require an organization’s ability to collect high-quality, clean data. That’s a foundational building block in any AI process.
Here’s where retailers face major challenges. When we commissioned Forrester Consulting to examine the state of AI for retail, the results revealed that many retail organizations are under-resourced, underequipped, and understaffed when it comes to implementing and operating the basic infrastructure required to deploy AI effectively.
Consider the following:
- 77 percent of respondents said their organization struggles to extract actionable insights from the data they collect; and
- 67 percent are unable to collect any usable data to help gain better business insights.
That’s a major obstacle since the collection of quality data is a crucial first step in any AI implementation. Data integrity is an area retailers continue to struggle to master.
Even bigger retailers face challenges with data management. However, they at least have the capital to invest to build the necessary infrastructure and processes. That’s a luxury not available to mom-and-pop owners that usually wear several different hats simultaneously while running their business with relatively limited resources at their disposal.
It’s also hard for retailers to keep up with the latest in technology and understand what it can do for them. What’s more, many would struggle trying to convert a current process with a new one while also keeping their stores open and business operating.
The fact that retailers aren’t quick to move forward when it comes to the adoption of AI isn’t a huge surprise. Retailers usually fall behind the curve when it comes to the adoption of new technology. The good news is that this transition is not beyond reach.
Retailers Can Find Footing One Step at a Time
Every technology solution for retail should be enabled with end-to-end, retail-focused applications that are designed to solve industry-specific problems. The technology should always be about empowering people in a way that drives return on investment.
Our approach has typically been that customers don’t need to be all-in on a newly introduced technology to benefit. Retailers can continue to operate their business using their ERP system and take advantage of the security that cloud solutions offer until they’re ready to make a change. AI adoption by retailers will likely follow a similar pattern. Once retailers get comfortable with the technology and understand how AI impacts workflows, they’ll be eager to go all in.
In fact, I see retailers catching up within five years, largely out of necessity; because if they don’t catch up, they’re going to be left behind the competition. AI is already demonstrating in other industries what it can do to bolster operational efficiency and boost employee productivity while reducing operating costs.
Education and Support Are Key to Transformation
Ultimately, this boils down to a question of market education.Retailorganizationsrequiremore education around AI solutions. Now it’s up to the industry to close that learning gap and help retailers understand how AI can transform their operations.
Janet Cordova is the senior product marketing manager for Epicor. With 30-plus years of sales and marketing experience, Cordova has worked with a variety of BTB small, medium, and enterprise markets.
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