Current Issues

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

Artificial Intelligence in retail – how will you apply it for the best outcome?

Artificial Intelligence in retail – how will you apply it for the best outcome?
When reviewing 2018’s retail landscape, there have certainly been ongoing challenges and opportunities that have pushed the evolution of retail to match the demands of a changing consumer. Mobile technology, speed of service/delivery, and low prices are just the tip of the iceberg.

In recent discussions with a variety of retailers and retail analysts in Australia and New Zealand, artificial intelligence (AI) and machine learning (ML) are high on everyone’s list of toys for the New Year to generate efficiencies across the retail enterprise. The question retailers are asking is whether to build an AI/ML engine themselves or, more probable, turn to a specialised software company already operating in the AI/ML space.

Consumers want their product and they want it now — in their size, flavour, length, shape, brand, weight. If you don’t have it, they’ll shop elsewhere.

Another competitive pressure is the rapid expansion of marketplaces. With Amazon investing in R&D at the rate of US $22.6 billion in 2017 (source: Bloomberg), and Alibaba investing US $15 billion over the next 3 years (source: CNBC) — both with an increasing focus on AI — it’s not commercially viable for most retailers to invest at that rate to compete against a seemingly endless variety of items/inventory, new store formats, and same/next day delivery. The ANZ market is yet to be significantly impacted by these e-commerce juggernauts, but given that Australia’s annual per capita household expenditure of US $27,595 is amongst the highest in the world, compared to China’s US $3,618 per capita spend, ANZ is a lucrative market to tap (source: CEIC).

Personalisation and customer centricity are often cited as the way to compete, but when trying to manage labour costs, inventory, supplier compliance, and competitive pressures, all from legacy software systems that IT departments are stretched to maintain, the necessary information and systems to serve the consumer consistently across all channels may not be available.

AI and ML could be the answer to better serve the consumer, but are we asking the relevant questions as to how AI/ML can be applied to achieve a successful outcome? We’ve all heard of Alexa, Siri, and Google Home – those voice-interactive devices that we carry in our pockets or place around our homes like little genies in bottles, just listening and waiting for a command. But there’s a lot more to it than voice recognition.

Where AI/ML drives value in retail is in the number of calculations it can perform, over vast amounts of data, drawing correlations between data points and providing recommendations/ actions on the pattern detections. The number crunching can be extreme and, as such, is generally only commercially viable when deployed in an elastically scalable cloud environment. Added to this, as more data is accumulated over time and the AI/ML engine can then measure the results of prior predictions (i.e., learn), it becomes even more accurate (i.e., self-aware).

What was less clear in the discussions with ANZ retailers on the AI/ML front was identifying a specific use case that delivers an outcome and the biggest bang for buck. What was consistent in those meetings is the high priority on a positive outcome for the consumer, whether that was:
Being able to direct an in-store customer to the item they’re looking for, but first confirming that the item is available before sending them on their hunt; and if the product is not in stock, being able to identify an appropriate substitute, or a nearby location that could fulfil the request.
Increasing supply chain efficiency based on:

o Vastly improved accuracy of future demand for each item at each location, factoring in promotions/halo/cannibalisation, causal events, demographic data, weather forecasts — the days of “clustering” should rightfully be dead.

o Choosing the right supplier/manufacturer that will deliver the product on time, in the right quantities, at the optimal cost, to the warehouse, store, or direct to consumer.
Reducing store and warehouse staff labour costs by optimising staff schedules to calculated demand (sales and inventory flow) — subsequently passing on lower operating costs to the consumer.
Delivering relevant analytical insight to business users, alerting them to deviations beyond tolerances and taking actions on their behalf.
Providing chatbots, both to the consumer and staff, that allow an ease of access to information and actions such as “I want to cook roast lamb tonight, order the ingredients for pickup on my way home from work.”
Fraud detection identifying problematic supply chain issues, and stores/registers/time of day to reduce shrinkage.
Pricing/promoting an item that will maximise the margin and hit sell-through rates.

These challenges have traditionally been met by staff with deep experience and knowledge, basic forecasting/optimisation or the good old “gut feel,” with varying levels of success but all leaving room for improvement.

These challenges are being tackled by software companies today leveraging AI and ML algorithms, some more successfully than others, and some just bandying about the terms without any evidence of delivery. What retailers must do is find a strategic partner that will listen and collaborate on a strategy that can addresses their biggest pain points to deliver bottom-line results.

Infor is approaching the AL/ML challenge on multiple fronts, as we don’t believe there’s just a single answer. Infor is building AI/ML as part of our inherent CloudSuite platform, with examples being:
Machine learning has been applied with tremendous success to our Infor Demand Management solution for increased accuracy in predicting demand curves and subsequently increasing consumer service levels while decreasing inventory levels, with far superior results compared to traditional forecasting solutions.
Given the Demand Management platform is designed to forecast sales demand, which in turn has the highest impact on the levels of in-store staffing, ML can be applied to optimise labour schedules in conjunction with local labour laws and enterprise bargaining agreements.
AI has been applied to improve data quality and business analytics by “filling in the gaps” on data that is incomplete to increase the relevancy and accuracy of decision support tools.
Integrating AI with asset management and Internet of Things (IoT) to predict maintenance needs to avoid or minimise equipment failure.

Will 2019 be a year that we see AI/ML kick into high gear and start flourishing in retail? I expect most retailers will commence their AI/ML strategy in some capacity this year and, given the speed to market urgency, they will engage software vendors experienced in this sector. Whether that’s a focus on improved ERP efficiency, supply chain optimisation, or customer information/experience, every retailer can benefit from this adoption.

Matt Quinn
Vice-President, Northern Europe, CHEP
Zero Waste World

Q&A with Matt Quinn, CHEP Vice-President, Northern Europe that sets focus on Zero Waste World

Sian Hopwood
SVP B2B Operations, BluJay Solutions
Black Friday - Can the Supply Chain Survive?

Sian told SUPPLY CHAIN TIMES why she believes businesses could reap the rewards if their supply chains are up to scratch

Craig Summers
UK Managing Director, Manhattan Associates
October retail figures signal a competitive seasonal hire market

Craig commented on recent data compiled by the British Retail Consortium and KPMG, showing rise in value of retail sales in October 2019 vs Oct. 2018

David Griffiths
Senior Product Marketing & Strategy Manager, Adjuno
Black Friday: more than a bargain

David explains why Black Friday has to become more than just a bargain-hunting game for consumers

Hilary Rundle
Director, Bis Henderson Recruitment
Five Key Questions on Gender Diversity In The Supply Chain

The corporate world may be actively pursuing initiatives to improve gender diversity within senior management teams, but progress appears slow.

Martin Ford
Senior Vice President United Kingdom & APAC, GTT
Agility in response to uncertainty is the key for UK business competitiveness

British businesses can still prepare for the future and improve both productivity and competitiveness

Craig Summers
Managing Director, Manhattan Associates
Finding the Profit in Personalisation

Personalisation is nothing new, however, it's something that many organisations fail to get right, particularly when it comes to the basics.

Michael Meizer
Area VP, EMEA Solutions & Professional Services, E2open
How will 5G affect the supply chain?

Will faster, more responsive and agile 5G connectivity represent an upgrade or a gamechanger for supply chains?

Andy Kaye
CEO, Bis Henderson Group
Risks over Brexit raise need for skilled Interim Supply Chain Executives

"Even if the UK finally leaves the European Union on 31 October, the bad news is, that isn’t the end"

Craig Summers
UK Managing Director, Manhattan Associates
What does AI really mean for retailers?

Craig warns against falling for AI gimmicks, how to leverage AI to its full potential, promote predictability & deliver a greater customer experience

Steve Richmond
Director Logistics Systems, Jungheinrich UK
Automation is the foundation for intelligent intralogistics

From anticipatory logistics to blockchain & connectivity through to Internet of Things (IoT), Steve considers the future of intelligent intralogistics

Ian Hall
COO, Atheon Analytics
7 things to plan in September to get right in grocery retail

Pragmatic, real-world & data-driven advice to help prevent grocery retailers & suppliers from making avoidable mistakes and missed sales at Christmas

Pól Sweeney
Vice President of UK Sales and Business Management, Descartes
Taking a smart approach to dock appointment scheduling

Pól outlines the transformation in the speed and responsiveness of DC operations - critical for ‘just in time’ supply chain

Alex Saric
Smart Procurement Expert, Ivalua
The business impact of the new PM’s approach

Smart procurement expert Alex Saric warns that businesses trading with the EU need to urgently review supply chain operations ahead of Brexit

Guy Cuthbert
CEO, Atheon Analytics
Bring clarity of purpose to fixing food waste

Identifying the impact that waste has on sales margin and customer perception, and looking at the steps we can take to reduce total waste

David Griffiths
Senior Product Marketing & Strategy Manager, Adjuno
Putting your brand in the hands of AI

Entrusting data and brand values to Artificial Intelligence and Machine Learning could prove to be your hero, not your villain.

Andreas Koenig
CEO, ProGlove
Wearable Technology - bringing data to the user and unlocking worker potential

The rise of the machine is fuelling essential discussions about the future role of workers – not least within logistics

Mike Thornton
Head of Manufacturing , RSM
UK manufacturing downturn mirrors other developed economies

Commenting on the latest results from the Markit/CIPS PMI manufacturing survey

Johannes Panzer
Head of Industry Strategy for Ecommerce, Descartes Systems UK
Is digitisation the key to preventing cross-border landed costs from disrupting international ecommerce?

How ecommerce organisations can ride the storm of uncertainty to international retail success.

Paul Croft
Director, 3DGBIRE
Taking the Hype out of the Innovation Cycle

From disrupting supply chains to rethinking material use and ending over-engineering, innovation is gaining pace.

John Perry
Managing Director, SCALA
Companies lose millions by side-lining procurement teams, research shows

SCALA surveyed a selection of the UK’s best-known businesses and 3PLs

Richard Seel
Managing Director Supply Chain & Logistics, Delaware
Meeting the Challenge of Supply Chain Efficiency – How Manufacturers Can Achieve their Goals

The process of building efficient sustainable supply chains is becoming increasingly difficult, manufacturers must ensure they don’t fall behind.

Olivier Binet
Managing Director International Markets, InPost
How to build sustainability into last mile deliveries

Why streamlined delivery is at the heart of a green supply chain

Ron Volpe
Global Vice President Apps Business Development, Tradeshift
Under-Pressure Retailers Turn to D2C to Level the Playing Field

‘Retail apocalypse’ continues to ravage the high street - 2,700 closed UK Retailers in 2018

Craig Summers
UK Managing Director, Manhattan Associates
Margin Erosion is turning the spotlight on the Warehouse

Craig explains how the next generation of warehouse operations will not only halt margin erosion but deliver new levels of retail profitability.

Simon Runc
Principal Visual Analyst, Atheon Analytics
Unlocking the Value in Data

The Science of Visualisation

Steve Purvis
Operations Director, Bis Henderson Space
Brexit Uncertainty Highlights Need for Flexible Logistics Strategy

Reassessing the balance of risk to supply chains and the potential horrors of trying to find well-located warehouse space

Alan Gunner
Business Development Director, Adjuno
Starting at the source: achieving a sustainable supply chain

Alan outlines why the key is for organisations to take control and focus on achieving full visibility

Craig Summers
UK Managing Director, Manhattan Associates
Conquering Connected Commerce

From the omnichannel dream to the retail reality, paving the way for future prosperity

Mark Jolley
EMEA Manufacturing, Transport & Logistics Solutions Sales Lead, Zebra Technologies
Augmented Reality is becoming a Retail Reality

4 ways this advanced technology is improving the shopping experience

Craig Summers
UK Managing Director, Manhattan Associates
The Cost of Doing Nothing

Retailers that continue to innovate, listen to their customers and invest in technology will reap the rewards;

Sam Ireland
International Marketing Manager, Loftware
Are You Navigating Global UDI Compliance?

If so, you won't won't want to miss this year’s European UDI Forum, taking place in Brussels, April 24-25

Stephen Cameron
Business Development Director, SWRnewstar
How the Resource and Waste Strategy Can Empower Industry

The DEFRA’s Resource and Waste Strategy sets out to reduce waste, get businesses to place sustainability higher up the priority list

David Jinks MILT
Head of Consumer Research, ParcelHero
No more fashion victims - retailers will flock to copy ASOS’ returns clampdown

ASOS’ new crackdown on ‘wardrobing’ will be replicated by most stores, says ParcelHero

Georgia Leybourne
Senior Director International Marketing, Manhattan Associates
Are we embracing the profit potential of the over 50s?

Far more demanding in their retail habits, more likely to invest in big ticket items, much more money to spend vs the younger generation.

Jon Moody
Chief Executive Officer, SSG Insight
The Future of Supply Chain Management

SSG Insight CEO Jon Moody discusses the importance of adopting a digital supply chain in a post Brexit Britain and Industry 4.0

David Luttenberger
Global Packaging Director, Mintel
Mintel announces top global packaging trends for 2019 and beyond

Mintel, the world’s leading market intelligence agency, has today announced four trends impacting the global packaging industry in 2019 and beyond

Andrew Tavener
Head of Marketing, Descartes UK
Compliance Management – it’s time for joined up thinking

How joined-up approach to compliance data transforms the overhead & provides insight that can deliver additional efficiencies throughout the business

Stephen Cameron
Business Development Director, SWRnewstar
Primark's move to 100 per cent sustainably sourced cotton should be commended

Primark is one of the latest retailers to announce new measures to become more sustainable by launching 100% sustainably sourced cotton jeans.

Marc Corriveau
Account Manager, Loftware
Changes in packaging result in ROI for F&B products

If you work for a food and beverage company, you may have noticed something about your competitors

John Perry
Managing Director, SCALA
Why an extension is best for British businesses

It is likely that the prime minister will now have to request a long extension to article 50 at Thursday's Brussels summit

Will Broome
CEO, Ubamarket
Increasing competition in the digital age will be beneficial for the high street

Increasing competition regulation during the digital age will not only be beneficial for consumers

David Jinks MILT
Head of Consumer Research, ParcelHero
Booking a courier? No printer required, says ParcelCompare

It’s a common misconception that a printer is essential when booking a courier pick-up.

John Perry
Managing Director, SCALA
Why an extension is best for food and drink businesses

Given that the Brexit referendum was only advisory, not in any way binding, there have really always been four potential outcomes open to us

Graham Parker
CEO, Gravity Supply Chain Solutions
Mitigating The Risks Of Trade Wars And Tariffs

As trade wars heat up, businesses need to protect their profit margins from increased tariffs.

Sam Ireland
International Marketing Manager, Loftware
How Brexit Will Impact Supply Chain Labeling?

The clock is ticking for the United Kingdom and European Union to finalize plans for the UK’s departure from the EU.

Sid Holian
Managing Director, Bis Henderson Consulting
Three critical steps to a hi-tech, agile supply chain

Retailers are facing a new reality and as a consequence supply chains must change.

Manu Tyagi
Associate Partner, Retail and Consumer Goods, Infosys Consulting
M&S and Ocado have signed a £750 million deal to take M&S groceries into the home delivery market

M&S’ deal with Ocado marks the high street retailer’s continued fight for survival, as it enters into the home delivery game.

Olivier Frère
Serialisaton Expert, Zetes
Understanding the Tobacco Products Directive

In a recent report issued by KPMG it was estimated that last year, counterfeit and contraband cigarette consumption was 8.7 % of total use in the EU