The seventh edition of the NEWretail series in cooperation with the IIHD-Institut examines the possibilities, advantages and implementation status of an automated value chain in retail. The risks of traditional, rule-based planning and forecasting models that focus on isolated functions in the value chain are presented.
Using specific practical examples, NEWretail shows why artificial intelligence is the key technology for the industry to be able to act and react quickly. Especially when customer proximity, personalization and converging business processes are key success factors for the next decades. NEWretail presents a holistic, circular model of the AI-enabled value chain and explains how the transformation of the AI-based value chain can succeed and how retailers can access the scaling and learning potential of the technology across the value chain.
NEWretail illustrates that the retail industry has finally been transformed by the pandemic. Fast reactions and agile methods have gained a growing importance and - according to the study - simplify quick responses to changes.
To ensure their continued success in the marketplace, many retailers are focusing on becoming more agile and effective – but at the same time with low costs. For this reason, they are investing in AI and robotics to develop digital strategies such as expanded web presences. In particular, the advancement and impact of AI on the consumer goods industry as well as retail is on the rise.
Retailers worldwide are realizing that new technologies are transforming the retail world quickly, forcing them to develop new strategies. Unfortunately, AI has too often been applied only in customer-facing functions. Yet there are application areas across the entire value chain - from omnichannel marketing to modeling the customer experience and designing customer-centric merchandising to sourcing and supply management and efficient store operations.
Kay O. Manke, Partner at BearingPoint
Simulation by digital twins of the real world opens up completely new opportunities for the entire industry - for example with regard to customer behavior, supply chains, processes and products. The NEWretail study at hand includes practical examples of international retail companies with regard to their efforts in the development of automated, AI-based value chains.
However, according to the White Paper, the scaling potential of digital technology across the value chain is yet to be realized, even though retailers are already increasingly testing the possibilities of AI. Many are not yet sure which technology to invest in and where to start transforming the value chain.
NEWretail shows the transformation of the retail value chain through AI. This is taking place by increasing the effectiveness of operations, improving store operations at lower cost, understanding customer needs and increasing personalization or improving customer service and thus strengthening customer loyalty.