Study Highlights AI's Potential to Improve Key Retail Processes Alongside Most Common Barriers to Adoption
NEW YORK, March 6, 2024 /PRNewswire-PRWeb/ -- Fluent Commerce, the leading provider of distributed Order Management System (OMS), Fluent Order Management, today released the findings of new research showing that while many retailers are eager to leverage artificial intelligence (AI) to improve mission-critical capabilities, they face significant barriers to capitalizing on its potential, with only 27% currently utilizing AI/ML to support inventory and order processes.
The research also reveals that the majority (69%) of retailers plan to adopt these technologies within the next 12-24 months, signaling a growing recognition of AI's potential to revolutionize retail operations. However, retailers also share a range of significant barriers in adopting predictive AI/ML technologies, including:
- Data preparation challenges: Almost half (43%) of respondents highlighted the complexity of preparing data for AI/ML models. Retail data often resides across disparate systems not originally designed for the nuanced demands of AI training, complicating the data preparation process.
In addition, the research also highlights a gap in historical data, crucial for training predictive AI models. Only 40% of retailers have records of stock quantities at each location when orders were placed, while only 36% track stock allocations across sales channels. This lack of historical insight into inventory levels, combined with gaps in order processing and delivery data, poses significant challenges for AI implementation.
When looking at fulfillment and delivery challenges, over two-thirds (68%) of respondents do not have location status data, such as whether a location was available to fulfill orders or not (due to weather, power outage, maintenance, etc.). Furthermore, 75% do not have historical data when it comes to average order processing time, which is a critical factor for optimizing fulfillment and on-time delivery.
Improving customer experience is hindered by a lack of historical shipping data, with most retailers missing crucial information on order fulfillment attempts, delivery times, costs and carriers. This deficiency in data prevents accurate delivery predictions and sourcing optimization, impacting three-quarters of retailers who lack insights that can help optimize their use of AI and ML applications.
Despite these challenges, the potential benefits of AI for retailers are immense. The survey highlights increased inventory returns, improved first-attempt delivery success rates and reduced markdowns as the top advantages. Specifically, over 62% of fashion and apparel retailers identified 'reducing out of stocks' as a key benefit, underlining the impact of AI on operational efficiency and customer satisfaction.
"Utilizing Predictive AI in retail, especially for enhancing backend operations, poses challenges but promises significant rewards," commented Nicola Kinsella, SVP of Global Marketing at Fluent Commerce. "Retailers aiming to capitalize on AI must identify their target business issues and gather a robust dataset, ideally spanning 2-3 years, to effectively train AI models. By carefully selecting or developing AI models that align with their strategic goals, retailers can achieve a competitive advantage that translates into operational efficiency and improved customer satisfaction. The process requires effort, but the benefits – ranging from better inventory management to enhanced delivery success – are potentially highly significant."
For a full copy of the research report, click here.
About Fluent Commerce
Fluent Commerce is a global software company focused on inventory data management at scale and distributed order management (DOM) for commerce. Both B2C and B2B organizations rely on their cloud native, highly flexible and fully scalable solutions to transform fulfillment complexity into a competitive advantage. Fluent Order Management provides accurate, real-time inventory availability across all locations, order orchestration, fulfillment optimization, fulfillment location management, in-store pick and pack, customer service, and reporting. This enables retailers, brands, and B2B organizations to ensure they never oversell or undersell and to deliver their orders profitably every time.
Fluent Commerce works with organizations such as JD Sports, L'Oréal, Prada Group, Aldo, LVMH, Dulux and Kingfisher. For more information visit fluentcommerce.com
Media Contact
Myra Austin, Touchdown PR, (512) 599-4015, [email protected], https://www.touchdownpr.com/
SOURCE Touchdown PR
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