As retailers face rising costs, reduced headcounts and increasingly complex operations, AI is moving from an experimental technology to an operational necessity. Catherine Frame, Director of Retail Solutions at UiPath, explores how retailers can use AI and automation to improve efficiency, make better use of data and build more resilient operations.
The UK retail industry and adverse conditions have been closely associated for some time. The last decade has seen the decline of the high street, rising operational costs, supply chain uncertainty and the need to strike the balance between competitive but profitable pricing.
This year and beyond, it’s imperative that retailers prepare for the next sector challenge — achieving operational brilliance, with less resources. AI is a key tool in the modern retailer’s arsenal to overcome this challenge. When deployed effectively, AI tools empower retailers to scale their operations with fewer resources. This means they can free up staff to focus on more customer-facing work and provide the data insights needed for a more accurate, predictive understanding of the market conditions that influence supply chains and inventory planning.
Retailers that prioritise strategic investment in AI tools will be best placed to tackle the challenges ahead, while those that don’t risk losing sales opportunities and loyal customers to competitors.
How to achieve growth with less resources
In Q1 this year, the British Retail Consortium reported that there was a year-on-year decrease of around 66,000 jobs in the sector, leaving many retailers struggling to maintain smooth internal operations while meeting rising consumer expectations, with fewer staff to support them. This is where AI comes in to close the gap between resource and expectation, enabling retailers to successfully scale operations.
AI is key for boosting efficiency and business performance, even with limited resources. Retail is inherently an admin heavy industry, with tracking inventory, customer orders, managing stock levels and liaising with suppliers all contributing to a significant time drain. A recent study indicated the average retailer dedicates almost 300 hours a year to routine admin tasks, with 66% of the retailers surveyed saying their volume of admin is only increasing. Reasons cited included growing inventories and the pace of order processing. By automating these routine administrative tasks, employees can devote more time to creative, customer-facing work that requires a human touch, and ultimately fosters long-term customer loyalty.
Going beyond internal data and admin tasks, AI agents also have huge potential in customer-facing operations, with it being predicted that they’ll handle up to 80% of customer service queries by 2029. When trained on a retailer’s own data, these agents can autonomously manage first-line queries and provide informed product recommendations, freeing human workers to focus on more complex issues.
Leveraging data insights for proactive decision-making
The long-term resilience and operational success of retailers largely depends on a proactive, informed approach to shifting market conditions, rather than reactive, last-minute strategising.
The outdated planning tools, and complex spreadsheets many retailers still rely on and only update every few weeks to months, are just not able keep pace with the tumultuous nature of today’s market conditions and evolving consumer trends. Real-time insights are imperative.
AI powered forecasting resets this process by drawing on real-time consumer data to forecast demand with up to 50% greater accuracy. This foresight enables retailers to plan promotions, manage stock levels and prepare for shifts in demand before they even occur.
Importantly, AI powers scenario-based planning. Rather than betting on a single forecast, retailers can run multiple real-time scenarios. This enables them to stress-test strategies against potential supply shocks or competitor activity, enabling proactive planning to ensure revenue opportunities and cost savings aren’t overlooked. For example, by leveraging AI planning, a leading UK multi-channel retailer optimised pricing markdowns to save a total of £2.4 million.
Reimagining workflows from the ground up
Before getting carried away with the operational enhancements that AI promises and the array of tools on offer, retailers must get their AI and data strategy in order. AI isn’t a plaster to be stuck on top of outdated, legacy systems, its success depends on rethinking operations from the ground up.
At the crux of operational excellence is an efficient, fit-for-purpose tech stack. By first ensuring that data is accurate, and of high quality, retailers can plan to deploy AI systems, including agents, to automate decisions and eliminate manual bottlenecks. AI frees up teams to focus on strategy, to maintain a competitive edge in the crowded retail landscape and drive long-term growth.
Retailers must act now to prepare for the next industry challenge
The challenge to achieve operational brilliance, both internally and in customer facing operations, is only in its early stages. Prioritising a modern data and AI strategy will be essential for reimagining operations, as a competitive necessity.
The brands and retailers that act now will come out on top. They can expect stronger business growth, more proactive and informed decision-making, and a greater ability to stay ahead of evolving consumer expectations while expanding their customer base.
Catherine Frame
Catherine Frame is Director of Retail Solutions at UiPath, specialising in helping retail and consumer businesses make smarter decisions with AI. Cutting through the complexity to deliver practical solutions that drive real commercial impact.
