Logistics and logistical challenges have been firmly under the spotlight for both consumers and retailers alike in recent years. Whether it’s the impact of shock events like the coronavirus pandemic, changing trading conditions caused by the Brexit referendum or a lack of preparedness for demand fluctuations during the most recent Christmas shopping period, retailers have been up against it when it comes to the smooth running of their supply chains.
Despite many of the challenges facing retailers being beyond their control, consumers are quick to notice and punish supply chain issues when they have an impact on the price of goods or the shopping experience. For this reason, retailers should be doing all they can to invest in processes that enhance the smooth running of supply chains and pre-emptively communicate with customers when things do go wrong.
Fortunately for brands, the past year has also seen an explosion of AI-powered tools and software that can do just that. Whether it’s tools that ensure supply chains run without bumps in the road, or communications tools that alert customers when delays occur, brands now have the tools at their disposal to make operations and logistics a more fluid process.
The boosts and benefits of AI integration
Whilst many of the benefits of AI happen to be customer-facing, such as customer support chatbots or personalised shopping features, there’s also a considerable amount of work which AI can conduct behind the scenes.
One such area is predictive supply chain and operations management software that can forecast logistical hiccups and track inventory to ensure a brand is always keeping up with consumer demand. What’s more, AI tools have the capability to benefit employees thanks to smarter planning and efficiency. There is an increase in cost-efficiency too, with automated AI units able to work without errors for a much longer period of time than a human, and without the risk of tiredness leading to potential error.
Yet even when errors do arise, it’s important brands have the procedures in place to communicate these with customers. Surprisingly, this is not something UK retailers are on top of. parcelLab research into 200 of the UK’s top retailers, found that 70% of delayed orders came with no alert of notification to the customer. Automation can make rectifying this issue a simple and cost-effective process, and the benefits it could bring in terms of consumer trust make it more than worthwhile.
What kind of problems can be caused by implementing AI?
Despite the clear benefits of integration, businesses must be aware of the potential challenges it can bring.
Firstly, the automation brought about by AI has been noted by some as a threat to many people’s job security. Whilst this concern is not without merit, with new innovations come new opportunities, and technological advancements of the past have created entire industries to replace what they may have taken away. In short, the less a brand has to spend on clearing up logistical or operational hiccups, the more it can invest in other consumer-oriented areas of the business.
Another issue that may be high on the mind of retail leaders is the cost of integration, and the potential need for additional training and higher-cost staff to manage this process. With the current economic climate uncertain at best, brands must consider whether the benefits AI is currently offering will work to improve outcomes for customers and for the business.
That said, with operational challenges caused by supply chain problems harming consumer confidence and impacting the bottom line for brands, the case for investment is clear. Brands should be thinking about the benefits of these tools now, or risk being left behind by those that do.
