The AI Advantage in Retail: Combine People, Data and AI to Improve Retail Planning and Meet Market Demand

AI is the buzz in retail and quickly growing as a ‘must-have’ for brands and retailers to optimize strategies. Retailers are investing heavily in AI, with the global AI-in-retail market projected to top $24 billion by 2028 and then head above $45 billion by 2032. The retail industry is just beginning to scratch the surface of the potential for AI to lower costs and enhance consumer experience, from managing high-demand events like Black Friday and Cyber Monday to developing fully automated cashierless stores. Personalization is a recurring theme, as AI-assisted customer behavior analysis enables retailers to tailor experiences to customers’ unique preferences and provide exceptional customer service. 

By 2025, IDC predicts that one-fifth of the leading 100 global retailers will have adopted AI systems to enhance business outcomes in decision-making, operations, and retail strategy, but AI is not a solution in itself. If you don’t have access to all the necessary datasets, or accurate, consolidated data, or if you let AI operate without sufficient human expertise and guardrails, it won’t live up to its potential. 

With a sound data foundation and the expert knowledge of your teams, AI offers powerful capabilities to detect patterns that humans cannot see, crunch numbers, and learn from data to make suggestions. 

However, for AI to be a profitable, transformative investment, brands and retailers must prioritize their data and organizational health. With millions of data points, hundreds of silos and dozens of offline ways of working, retailers must look to first fix the gaps in their data management before looking to derive any true insights.  

Only by uniting all data points across a process, can AI begin to shed some light on how to better drive efficiency and profitability. 

An AI-driven planning solution such as Centric Planning™ uses powerful algorithms to quickly make sense of data to speed efficient decision-making, improve sell-through and maximize profitability. 

Reduce excessive discounting and increase margins 

AI-based forecasting in Centric Planning uses product performance data to make recommendations on the ideal number of options per attribute, as well as big-picture conceptual assortment plan recommendations. 

This enables more accurate sizing, quantity and initial allocation, more targeted product ranges and more efficient use of raw materials. Time saved on manual tasks can be reclaimed for agile, targeted planning. 

For an omnichannel business with thousands of SKUs sold in multiple geographies, managing all this information in spreadsheets quickly leads to the wrong items in the wrong place resulting in excessive stock and a need to heavily discount to clear shelves. 

Centric Planning streamlines the management of all these SKUs, taking local preferences and currencies into account when deciding on where to place items so they will more likely sell at full price. Being able to cost-effectively allocate and transfer inventory between e-commerce and physical stores increases sell-through, reduces discounting and increases margins.  

Using spreadsheets for omnichannel merchandise and assortment  planning is an inefficient manual process, leaving no time for strategic, data-driven analysis. With an AI-powered planning solution, teams can optimize inventory across multiple product categories and effectively support new market expansion while ensuring current assortments are localized. 

Centric Planning uses machine learning algorithms to determine patterns in sales data and ‘cluster’ similar product/style/shopping attributes for more targeted assortments. Localized assortments reduce the likelihood of poor stock turn, resulting in higher consumer satisfaction and support mass expansion plans into new regions.

Omnichannel businesses that operate across regions have to handle an enormous amount of complexity to allocate and replenish SKUs for maximum sales. It’s impossible to manage all this data on spreadsheets without the use of AI automation tools. 

For brick and mortar retailers with stores across multiple regions, AI can assist in stock allocation, replenishment and transfers by recommending the optimal location to transfer low-selling stock where it will have a higher chance of sell-through. AI supports accurate store clustering to ensure the right stock in the right place at the right time to avoid losing out on sales, reducing the need for discounting and improving sales across stores overall.   

Centric Planning is just one element of Centric Software’s AI-driven product concept-to-replenishment platform.

AI and smart data help teams to multiply human efforts by combining both artificial and human intelligence. Our AI-driven solutions drive collaboration, improve processes and introduce automation and transparency into decision making. Embracing the powerful combination of people, data and AI enables brands and retailers to thrive in today’s fiercely competitive and ever-changing marketplace.