Many businesses are adopting AI across a variety of business areas. But the key to success is to ensure your team is ready to get the most out of it
How many innovations have you introduced to your company which have been put on a back burner by your team silently? Probably, a lot. We all are creatures of habit. Doing something habitually puts us right in the heart of our comfort zones, which we are extremely unwilling to give up. But the modern world of retail almost requires companies to get ready for AI adoption, or they risk becoming history. Therefore, retail teams should gear up for using intelligent automation properly and in the most beneficial way.
AI is here to help. Let’s start with some numbers. Artificial intelligence is projected to earn an additional $15.7 trillion globally by 2030. Retail is named among eight industries which are expected to benefit from AI the most thanks to its potential “to increase productivity, product quality and consumption.”
Pricing is among the priorities for AI optimisation as the price of a product is the first thing customers base their purchase decisions on. Some 73% of businesses are looking into optimising pricing and promotion with the help of intelligent automation. “AI price optimisation can reduce the repricing time by five times and help retailers boost their revenue by up to 16%,” comments Vladimir Kuchkanov, pricing solutions architect at Competera, a pricing platform.
However, introducing AI is not always a piece of cake. As many as 47% of surveyed executives found it “difficult to integrate cognitive projects with existing processes and systems.” And yet, companies are almost unanimous that it is worth it. Such tech-powered benefits as “making better decisions” and “freeing up workers to be more creative by automating tasks” are among the top ones cognitive technology can bring to business. As many as 92% of the consultant’s respondents state that cognitive technology is “important” or “very important” to internal business processes, and a third of them are employing AI to aid humans and support better decision making.
What should retailers do to prepare their teams for artificial intelligence? They should educate their employees. The first step would be to teach managers to use an AI-powered solution. For example, to launch a repricing cycle or order new products to prevent the out-of-stock situation with its help. But this is the easy part.
The hard part is to help retail teams learn to interpret and apply machine-generated price recommendations. AI can “improve decision-making by accurately predicting outcomes and sifting through unstructured data to find answers to questions.” Elasticity-based algorithms process vast amounts of data (which is usually unmanageable for humans) and come up with sometimes unexpected suggestions. That’s where psychology kicks in. As managers cannot debug the logic behind every recommendation, very often they refuse to apply machine-powered ideas. The thing is that to understand the behind-the-scenes of every pricing decision, managers would have to be no less than data scientists. Therefore, it would be more beneficial for retail teams to transition from micromanaging the performance of separate products to measuring the results of the whole category or product portfolio without trying to figure out the algortihm’s logic (and correct the algorithms, if necessary). This helps managers make more beneficial pricing decisions (and grow sales and revenue), reach the next level of strategic thinking, manage more categories and even further their careers.
To sum up, retail is already unfolding the AI-backed optimisation of every business process to become more efficient and earn more. But deploying machine learning-based improvements does not necessarily translate into a success story. A successful adoption is backed by a fully prepared team of end-users. Retailers should educate their teams to reap significant financial benefits.