It’s not all doom and gloom for the retail sector as new research reveals the brands using artificial intelligence (AI) are growing 30 per cent faster than their counterparts who aren’t.
The technology, which can give struggling retailers the boost they need, is set to add an additional £27 billion to the UK market each year, retail AI specialists Peak has found.
AI can predict buyer behaviours and preferences in real-time, enabling retailers to personalise offerings, which is proven to dramatically increase sales. It can also forecast demand, which gives retailers the power to a make considerable reductions in inventories and free up cash.
Richard Potter, CEO of Peak, said: “We’ve seen the downfall of several major brands in recent months and they all had one thing in common. They either failed to implement AI or didn’t use it in the right way.
“It’s sink or swim time for retailers now, and AI is throwing them a lifeline. There is no doubt that every brand will need this technology if they want to survive what is proving to be a difficult time for retail.”
The research also looked at how specific sectors of retail can benefit from AI. It found that sub-sectors such as food and beverages retailers can reduce their inventories by £1.4 billion if they implement the technology, while the automotive sector could free up £4.7 billion.
“AI is the Fourth Industrial Revolution. For retailers, it’s not going unnoticed, but there is an element of education to come.” Potter continued. “When the CEO of a FTSE retailer came to us 18 months ago, he wanted our help in reducing the amount of stock the company was holding, to help them outperform their competitors. He had read about AI but didn’t fully understand the power it offers. Now, following the engagement with Peak, we have cracked that problem – they have dramatically reduced without impacting sales and are now dominating their sector.”
Peak enables retailers and other businesses to bring AI into the heart of their operations. Available on a monthly subscription basis, Peak’s services provides retailers with the technology, people and skills they need the become AI-driven.
“Consumer behaviour is constantly changing – from how we shop, to where, what time and why. These actions are giving retailers data, and lots of it. This can be harnessed to improve and adapt product offerings, marketing communications and supply chains like never before, all of which adds up to the huge boosts in revenue and profit performance we see from those who adopt AI technologies.” Potter concluded.