Retailers turn to AI and automation to boost profits

Retailers are innovating with technologies that improve operational efficiency in a bid to reduce costs and increase profitability, according to new research.

 

The recent 2023 Connected Retail Experience Study, conducted by Incisiv in collaboration with Verizon Business, shows that real-time inventory management has risen to the top of the investment agenda in the face of uncertain supply chain issues that retailers have faced for the last few years. The deployment of AI for improving operations will also increase nine-fold, with a higher percentage of specialty and department stores adopting it than grocery and general merchandise stores.

 

Mobile point of sale (POS) and curbside pickup sensors will significantly increase deployment across all retailers, particularly among specialty and department stores. While the deployment of robotics for associate tasks is still relatively low, it will increase over the next few years, particularly among grocery and general merchandise retailers.

 

The study also shows that retailers anticipate a significant increase in automation and expect up to 70% of routine tasks will be partially or fully automated by 2025. They expect to leverage the labor and productivity benefits by re-deploying associates to customer-facing high-value tasks (18% of retailers) and support business operations (26% of retailers).

 

“Improving operational efficiency is crucial for retailers in today’s competitive landscape,” said Gaurav Pant, Chief Insights Officer at Incisiv. “Automation is imminent, and retailers must embrace it to streamline processes and reduce costs.”

 

The increased deployment of new store technologies, adoption of cloud applications, increased customer devices, and increased in-store associate devices will test the store network’s ability to handle additional traffic, particularly when it comes from devices that require low latency and process bandwidth-heavy files, said Verizon.

 

“As the number of mobile and connected devices continues to accelerate in stores, the need for faster speeds, less network downtime and a better ability to manage peak traffic will become more critical,” said Scott Lawrence, Senior Vice President Global Solutions, Verizon Business. “The key is to build a network architecture that will give in-store applications access to the right bandwidth at the right time, and enable them to scale up or down as needed.”

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Book of the Month*

The Serendipity Mindset: The Art and Science of Creating Good Luck

By Dr Christian Busch
Serendipity is an aptitude for making desirable discoveries by accident. To other people it looks like “good luck”, but it is more the ability to recognise and seize an opportunity, rather than have good fortune thrust upon one. Finding a wallet stuffed with money on the conference room floor is good luck, whereas holding it up and asking if anyone has lost their wallet might be the beginning of a valuable friendship – that would be serendipity.

Chance encounters, or strokes of fortune, feature in countless stories of business success. This book looks beneath the surface, reveals and teaches the mindset that can transform pure chance into opportunity. The author is director of the Global Economy Program at New York University’s Center for Global Affairs, and a lecturer at the London School of Economics.

Serendipity is an aptitude for making desirable discoveries by accident. To other people it looks like “good luck”, but it is more the ability to recognise and seize an opportunity, rather than have good fortune thrust upon one. Finding a wallet stuffed with money on the conference room floor is good luck, whereas holding it up and asking if anyone has lost their wallet might be the beginning of a valuable friendship – that would be serendipity.

The author says “This is a book about the interactions of coincidence, human ambition and imagination”. In the above example: finding the wallet is the coincidence; ambition is the desire to make something of the discovery; add imagination and you open up a whole menu of possibilities: from spending spree to earning a reputation for honesty – or even making a wealthy friend.

Business is typically forged on human ambition and imagination, but early success often feeds an appetite for control – and “control freaks” can be blind to the opportunities thrown up by the unexpected. They only see chance events as distractions. If plans go awry, they may blame the failure on “bad luck” rather than admit their own inflexible attitude.

The author himself admits to being “a German who is used to planning” and prone to feel anxious when something unexpected happens. That makes him an ideal teacher, because he has worked hard to discover and analyse the mindset that enables one to “connect the dots” and cultivate serendipity. He presents a goldmine of examples from science, business and life where an apparent mishap or failure lead to a breakthrough.

Indeed, studies suggest that around 50% of major scientific breakthroughs emerge as the result of accidents or coincidences. A well-known example is Alexander Fleming’s discovery of penicillin, launching the whole field of antibiotics. Other examples include X-rays, nylon, microwave ovens, rubber, Velcro, Viagra and Post-it Notes – where would we be without these!

The book goes beyond the ability to recognise and respond to opportunities in chaos, but the subtitle – The Art and Science of Creating Good Luck – is actually a bit misleading. True, he does show ways to develop better fortune, but it would be better to call it “inviting” or “encouraging” good luck. For example, he suggests better ways to start a conversation with a stranger – ways that will make it more likely to lead to chance connections or shared interests.

The publishers may have chosen the word “creating” to make the book appeal to the human desire to control – for control freaks are exactly the readership that would benefit the most from this book’s wisdom and practical advice.

For the rest of us, it offers a great way to rediscover the sense of play that is so important in life – and too often lost in business.

 

“Following the success of The Serendipity Mindset hardback, a paperback edition has also now been launched under the title “Connect the Dots”.

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