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When we hear the term ‘generative AI’ many of us immediately think of the capabilities of open-source content and image generators, such as ChatGPT and Midjourney. The truth, though, is that generative AI is capable of so much more – you just need to know how to reap its real benefits.
For the early adopters out there, Generative AI is transforming their operations, customer journeys, and workflows. For the retail sector in particular, the potential for generative AI is immense. This is especially true when you consider how retailers need to start adapting to rapidly shifting consumer spending behaviours and the challenging economic climate.
One area that retail businesses can look to improve with Generative AI capabilities is their supply chain. By putting tailored Generative AI models in place, you can optimise and modernise your supply chain from the point of manufacturing right through to when your product reaches the customer’s hands. This in turn will help you to better meet product demand and maximise profit margins by taking advantage of opportunities to reduce supply chain expenses.
Advanced Forecasting
The dynamic and fast-moving nature of retail means accurate forecasting can be difficult to achieve. In an environment where everything from product lines to price points can rapidly shift year-on-year, basing a forecast on past data alone is not a viable way to ensure accurate predictions.
This is where Generative AI comes in, with its capabilities for predictive analytics and scenario modelling. By using sales data from previous years alongside consumer trend data, Generative AI forecasting models can not only aggregate data patterns, but can contextualise them to more accurately predict future demand.
Stock Management
In retail we are all too aware of how critical stock management is to a positive bottom line. Seeking that ‘goldilocks’ balance of just-right stock levels that meet demand while minimising excess can be challenging and, if not done well, can negatively impact your brand reputation or profit margins.
Starting with advanced forecasting, Generative AI can go even further in optimising your stock management by improving workflows and using real-time analytics. By combining your predicted forecast with real-time demand data, Generative AI can help optimise inventory levels and reduce the need for markdowns.
Pricing and Promotions
Deciding how to price your products in scope of your market is a balancing act that could make or break your profit margins. If you price your products too low then you’ll lose out on crucial profit potential, but price your products too high and you’re likely to lose out on revenue as customers select a competitor who offers better value for money.
Generative AI can be used to recommend profitable, yet competitive, pricing strategies based on competitor and market analysis data. It can also be used to implement dynamic pricing strategies that respond to real-time changes in demand, or to optimise your promotion planning through periods of seasonality or trends.
Implementing Generative AI with Your Business
If you’re looking to improve your forecasting, stock management, or price planning, then Generative AI could be the answer. When implementing AI into your business, it is crucial that you do it correctly to make sure you are using it responsibly and to its full potential.
At TPC, we can advise you on best practices when it comes to using Generative AI, as well as offer our expertise in coming up with a tailored AI-driven solution to meet your business needs. To allow Generative AI to work at its best, you need to make sure you’re prepared with the data and learning materials it needs, as well as with the knowledge to understand and use its output. Our experts can help you get there, and will see you through the entire process.
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