Meeting the ever-shifting demands of consumers, market trends, and regulatory mandates is a continuing challenge for retailers. Yet only by understanding and acting on the critical forces driving today’s retail industry can companies survive and thrive.
This year’s top three retail focus areas are AI and analytics, profitable growth, and meeting sustainability requirements. Read on to learn how retail data solutions can help you maximize the value of these trends.
Maximizing AI in Retail with High-Quality Data
AI helps retailers automate manual, error-prone tasks for greater efficiency and accuracy. In fact, one IDC analyst recently estimated that 87% of retailers are already using AI and analytics technology.1 Typically this technology supports back-of-house use cases, such as increasing warehouse throughput or forecast optimization.
In contrast, generative AI tends to enable customer-facing retail operations, such as service chatbots and marketing communications. The difference is significant: although a poor logistics decision might eventually trickle down to the consumer, an offensive bot-generated message or a poorly crafted email can negatively and immediately affect the customer experience.
To avoid exposing customers to such negative experiences, retailers must ensure that the large learning models (LLMs) supporting generative AI use only fresh, accurate, and complete data. LLMs share and replicate their data and learn from one another. If the data quality is poor, over time the data degrades and becomes “synthetic” and can even lead to model collapse.
By using fresh data from your own organization – rather than data of questionable quality scraped from the Internet – you can ensure that generative AI creates positive customer experiences. Retail data solutions can help you create high-quality, well-governed, trustworthy data that feeds AI and analytics tools, fueling desired business outcomes.
Drive Profitable Growth Through Enhanced Supply Chain in Retail
After experiencing the two best years in history, the retail industry experienced a turbulent 2023 market battered by inflation, hiring issues, and inventory overages. As retailers retrofit their businesses to adapt to market conditions, every change must focus on profitable growth.
In a recent survey of 250 consumer products executives, Deloitte found that supply chain performance is still a driver for growth, with 98% saying it is a clear or top priority. Of those companies identified as profitable growers, 73% are focused on supply chain stability and enhanced data capabilities.2
The ability to share data throughout the three-tier supply chain infrastructure correlates directly with profitable growth. In the Deloitte study, 90% of profitable growers share data with consumers. About 76% share data with key trading partners. And 48% of these companies share detailed data, such as shipping information and sales forecasts, with partners throughout the supply chain.
Using collaboration and data sharing to enhance supply chain transparency, retailers can get closer to their suppliers and customers while boosting profitability. But there is one caveat: you must protect this data at all costs. Retail data solutions can provide privacy for supplier and customer data and protect your company’s data assets.
Streamling ESG in Retail for more Sustainable Outcomes
Compliance with various environmental, social, and governance (ESG) mandates is a big job for even the most forward-thinking retailers. Sustainability mandates differ by country, but many retailers with multinational operations are working to comply with the earliest deadlines. A top priority is the need to gather information about each company’s carbon footprint.
This data is divided into three levels or scopes:
Scope 1 – The greenhouse gases created by your company
Scope 2 – Your purchases or investments that generate a carbon footprint
Scope 3 – All other emissions related to your company, including your supply chain
Some experts estimate that as much as 80% of a company’s carbon emissions are found in the supply chain. Yet the data collection process is still manual, and most retailers can’t connect their supplier data to their operations or match supplier data with their company data.
Retail data solutions can help you automate and accelerate the gathering of sustainability data. By simplifying and streamlining data collection and data management, these tools can make it easier to meet your ESG goals.
In addition, data management solutions can support responsible or ethical sourcing practices. In areas where sustainable practices are required for your first-, second-, and third-tier suppliers, these solutions can gather compliance data and identify non-compliant suppliers. When you need to re-source materials, the solutions can identify compliant providers.
Gain value from retail industry change with AI-powered data management solutions
Taking the right actions at the right time requires new retail insights and data-driven decision-making. Retail data solutions ensure your AI and analytics tools produce desired outcomes, your supply chain data is clean and well-governed, and you can overcome the complexity of sustainability and ESG compliance.
To learn more about how data management solutions can help retailers compete more effectively, visit the Informatica retail page.
1National Retail Federation, “3 ways retail MarTech leaders are preparing for the consumer of the future,” July 2023
2Deloitte, “2024 consumer products industry outlook,” 2024
