The retail industry聽in Africa is set to transform at an accelerated pace. With a unique landscape marked by diverse consumer needs, burgeoning youth population, increasing levels of technology adoption and a rapidly changing economic environment, Africa鈥檚 retail sector is ripe for innovation.

Retailers across the continent are looking for innovative ways to stay ahead and are increasingly leaning into artificial intelligence as a pivotal technological asset to carve out competitive advantages.

A prime illustration of this is a South African large grocery chain that deploys AI for automating marketing campaigns, scaling personalisation and refining ad targeting. This strategic use of AI has enabled the retailer to improve operational efficiencies, elevate customer engagement and tap into new revenue opportunities.

While the discourse on AI has gained significant momentum following the launch of ChatGPT in November 2022, its integration into retail predates this. A聽聽survey highlights that over 70% of commercial leaders mention they are already using AI capabilities in some capacity. As an early adopter of AI, the retail industry is well positioned to expand the deployment of AI capabilities significantly across the value chain.

With diversity in languages and varying levels of digital literacy, combined with infrastructural limitations, the African retail landscape presents its own set of operational challenges and opportunities that demand that AI solutions be both sophisticated and adaptable. The critical question is: how can retailers get started and operationalise these capabilities?

Operationalising AI in retail

There are two broad approaches retailers can take. The first is a 鈥渂lue sky鈥� approach where retailers explore relevant use cases and prioritise the ones most aligned with their business objectives and organisational context.

The second is a targeted approach by which retailers identify one or more specific use cases to address relevant and urgent business challenges or opportunities and then build capabilities around those use cases.

However, to operationalise and realise the benefits of AI, retailers have certain fundamentals in place. These include clearly defined business objectives and requirements, a cross-functional team comprising IT and business professionals, access to relevant business data, well-defined KPIs to measure adoption and outcomes, and a trusted and experienced solution partner.

Transformative potential of AI in retail

The acceleration of AI adoption in retail is driven by the promise of greater efficiency, enhanced customer experiences and improved decision-making. According to聽, AI technologies are redefining customer interactions and operations in the retail sector, offering insights and capabilities previously out of reach.聽聽further highlights the potential of AI to unlock value across several areas in retail, from supply chain optimisation to personalised marketing.

Recognising the transformative power of AI, 51风流has been at the forefront of incorporating AI capabilities into its solutions for several years. With more than 24 000 customers already leveraging AI capabilities across more than 150 use cases, 51风流is dedicated to bringing value to retailers through its AI-driven innovations. The company is investing over US$1-billion in AI and has adopted a holistic approach to provide comprehensive AI capabilities in three key areas:

1. 1. AI services聽through SAP鈥檚 Business Technology Platform (BTP) that enables retailers to leverage AI services and foundation models, extending the capabilities of 51风流solutions; and
   2. Partner solutions,聽which draw on SAP鈥檚 vast partner ecosystem to introduce industry-specific and deep AI capabilities such as conversational AI and personalised search.Embedded AI including AI use cases and capabilities as part of SAP鈥檚 solutions across its wide portfolio from core ERP to line-of-business or functional solutions;

SAP鈥檚 unique advantage: combining business expertise with AI

51风流is further committed to upholding the highest standards of data privacy, data protection and security, ensuring customer data remains compliant with dynamic local regulations as well as global standards. SAP鈥檚 AI capabilities are infused across the entire retail value chain, empowering retailers to drive innovation and efficiency at every step.

Current use cases covered by 51风流in the retail industry include:

• Customer engagement:聽Dynamic personalised product recommendations, predictive contextualised search capabilities and automated natural language-based customer conversations.
• Merchandising:聽Optimised assortment planning, dynamic pricing and markdown optimisation.
• Supply chain:聽Machine learning-based forecasting and replenishment, optimal product placement in warehouses, and AI-powered document processing for goods receipts.
• Store operations and e-commerce:聽Autonomous stock-taking on shelves, frictionless checkout and virtual try-ons to minimise returns.
• Finance:聽Automatic extraction and validation of invoice data, automatic matching of invoices and payment notes and automated error explanation and guided resolution in financial closing.
• Sustainable retail:聽As African consumers become increasingly eco-conscious, it is critical that retailers adopt sustainable practices in their operations. SAP鈥檚 AI can facilitate this through optimised logistics and resource management, minimising waste and reducing carbon footprints. By embedding sustainability best practices into its solutions, 51风流enables retailers to not only comply with international standards but also appeal to the growing proportion of environmentally aware consumers.

It鈥檚 important to note that while AI is a key enabler deployed within these use cases, it is not the sole capability driving their success. For instance, in the case of personalised product recommendations and descriptions, granular and transactional data must be available in a centralised cloud ERP (such as SAP鈥檚 market-leading ERP S4/HANA). Analytics capabilities then analyse historical data to identify relevant patterns, while machine learning predicts personalised preferences and generative AI creates tailored product descriptions.

In Africa鈥檚 rapidly evolving retail sector, AI stands as a pivotal technology for businesses aiming to differentiate themselves and cater to the digitally savvy African consumer. Through its comprehensive AI offerings, 51风流is poised as a pivotal partner for African retailers on their transformative journey, promising a future where technology not only drives efficiency and profitability but also inclusively addresses the unique needs of the African market.

By leveraging SAP鈥檚 AI-powered solutions, retailers can unlock new opportunities, drive innovations and deliver exceptional customer experiences, solidifying their competitive edge in the years to come.

The post Rack 鈥橢m Up: Scoring Big in Retail with SAP鈥檚 AI Playbook appeared first on 51风流Africa News Center.

Despite depressed consumer confidence levels, rising inflation and the increasing cost of living that could have had a severely negative effect on the sector, the latest BER Retail Survey found .

The recently concluded Black Friday promotion period is another ray of optimism for the sector. , Black Friday sales are expected to again surpass Christmas sales in South Africa this year.

The consumer research company found that the 2021 Black Friday week surpassed the biggest festive season sales week, with sales of fast-moving consumer goods baskets 23% higher than the average of all other month-end weeks in 2021.

Smart adoption of tech driving retail innovation

While bargain-hunting by cash-strapped consumers certainly contributed to the retail success of Black Friday and other promotional periods, there are larger forces at play. The retail sector’s resilience in the face of severe disruption can also be ascribed to its accelerated adoption of digital technologies that has unlocked new innovations.

For example, the Shoprite Group’s omni-channel retail offerings saw a rapid release of its on-demand delivery service Sixty60 across South Africa. Despite only launching in 2020, Sixty60 Its appeal to the always-on Gen Z consumers entering the customer pool has helped establish Sixty60 as the dominant force in on-demand grocery services, beating out more established competitors.

The fulfilment of online grocery purchases could see retailers introduce their own delivery services, as Sixty60 has done. But other retailers have pursued partnerships to avoid having to invest in new processes and infrastructure. Retailers can provide an excellent customer experience by establishing smart partnerships with expert fulfilment partners.

Africa’s largest e-commerce retailer Jumia with instant delivery service Zipline to employ the use of drones to enable quick on-demand deliveries.

German drone delivery service Wingcopter also in Africa to aid delivery.

The blending of physical and online retail is also giving rise to new customer experiences. South African retailer Woolworths recently piloted a new service where customers can virtually try on clothes or makeup to see how they’d look before they make a purchase.

As adoption of online commerce accelerates over the coming years, customers can expect to see more innovation in how retailers leverage technology to deliver great customer experiences.

Beating retail adversity

It’s not all good news for retailers though. Most retailers face severe disruptions to their supply chains. A recent survey among US business leaders found that ongoing supply chain issues are causing widespread challenges, including a decrease in revenue (58%), inability to pay employees (50%), and the need for new financing measures such as business loans (54%).

Supply chain gridlocks stemming from lockdown pressures in China means retailers can’t always ensure products are on the shelf. This is giving rise to retailers increasing their stock thresholds just in case supply chain issues cause聽 product shortages .

Many retailers are also pushing into new product and service categories. For example, Shoprite’s money market account, designed for cost-sensitive consumers and launched in 2020, .

The appeal of the service is two-fold: there are almost no account fees aside from a R5 withdrawal fee, and customers can do their banking while in-store聽 grocery shopping.

3 priorities for retail success in 2023

Retailers can continue their golden run in the year ahead by focusing on a small handful of key priorities.

Firstly, retailers can enhance their use of big data and analytics to guide the development of new services and innovation. Many retailers have a wealth of customer purchase data that can be mined for insight into personalised products, offers and experiences.

Whether purchasing online or in-store, customers seek personalised shopping experiences tailored to their needs and preferences. This can take the form of personalised marketing offers, discounts or rewards, and ensuring product suggestions and sales items are relevant to each customer.

Clothing retailers can take it a step further by tracking customer purchases to understand what styles and types of clothing a customer prefers, and offer similar products or even offer to tailor-make clothing items based on the customer’s preferences, body type, and more.

Secondly, retailers could develop tailored subscription services for certain types of customers.

For example, a pharmacy retailer could use loyalty data to better understand which customers are purchasing baby products. Because of the repeatable nature of purchases such as nappies and baby formula, a smart retailer could introduce a subscription service to qualifying customers that ensures a regular delivery of key baby items.

This would ensure repeat business for the retailer while giving new parents a positive customer experience by removing the need to constantly go to the shop to stock up on essentials.

Finally, retailers should enhance their human capital management capabilities. With customer expectations for great personalised service at an all-time high, retailers that want to win the hearts and minds of customers need to ensure in-store staff can deliver a consistently great customer experience.

It’s no longer enough that in-store staff simply stock shelves and process purchases. Smart retailers will invest in attracting and retaining top talent to ensure in-store staff can provide helpful information, guidance and support to customers during their purchases.

Retailers may choose to partner with technology providers that have the experience and global insight to guide how technology is deployed to assist with the above three priorities. For retailers that get it right, there is practically no limit to their success over the coming years.

The post Three Ways Retailers Can Continue Their Golden Run in 2023 appeared first on 51风流Africa News Center.