The factors underpinning AI’s success

In part three of this blog series, Sandra Stanley—dunnhumby’s Chief Data Science Officer—looks at the key capabilities that retailers need to have in place if they want to tap into the transformative potential of Artificial Intelligence (AI).
 

 
Having the right foundations in place and understanding the solutions that AI can offer in the retail arena are both essential steps to fully embracing AI. But they can only take retailers so far. For AI to truly deliver the kind of results that retailers might expect, they also need to ensure they have a number of key capabilities in place. Ultimately, these "AI enablers" will go a long way to defining the success or failure of an AI initiative.

So, what are they? In my eyes, there are seven specific things that retailers need to focus on.

1. Harnessing the power of data
   To really create a more personalised and efficient shopping experience for customers, retailers need to go further than simply collecting data—they need to apply the knowledge it gives them, too. By gathering insights from various sources (like transactions, online interactions, and social media, for example) retailers can consolidate this information to build a 360-degree view of each customer.

   Predictive analytics then enable them to identify trends and forecast demand, while behavioural signals can help anticipate customer needs before they arise.

2. Putting the customer at the heart of their decision making
   Every customer wants to feel like their shopping experience is tailored specifically to them, but this can only happen when a retailer puts them at the heart of their strategy. Using AI to deliver personalised shopping experiences and pinpointed marketing helps customers feel valued. And analysing customer data lets retailers gain deeper insights into preferences and behaviours. It also enables them to stay agile and responsive to evolving customer demands.
3. Streamlining their operations
   One of the key benefits that AI that can offer retailers is the ability to streamline operations by automating routine, repetitive tasks and freeing up staff for more strategic activities. Using AI can help optimise marketing efforts, as well as refining customer targeting and enhancing overall business processes. As a result, resources can be used more efficiently and decisions made based on deeper insight.

   Naturally, this also means that retailers must train staff to use AI tools effectively. By equipping a team to make the most of AI’s vast potential, productivity will increase and a more agile and innovative retail environment can emerge.

4. Fostering a culture of innovation
   As mentioned in the first post in this series, the full extent to which AI will reshape the retail landscape is yet to be seen. But one thing is for certain—change is going to be constant over the coming years. To stay ahead of market trends and emerging technology, its essential to foster a culture of innovation where teams can quickly respond to shifting consumer demands and industry evolution.

   Staying agile—and nurturing that spirit of creativity—can help to ensure retailers remain competitive and able to get the best out of new technologies.

5. Ensuring security and embracing ethical practices
   AI technology can be an intimidating prospect for customers, who might resent its creeping intrusion into their lives. Retailers must prioritise robust data security measures to reassure customers that their information will be protected and build trust. Committing to transparent, ethical, and fair AI practices will also go a long way to overcoming that uncertainty, and helps to build long-term, sustainable relationships.
6. Opening themselves up to collaboration
   Collaboration with innovative suppliers can help by pooling AI investments, helping to ensure better value for customers. Partnering with technology providers for advanced solutions is also crucial; it makes little sense for retailers to build their own capabilities considering the vast amount of data science and AI expertise required.
7. Measuring, refining, and continuously improving
   Fully embracing AI means more than just using it—it means thinking about how to apply it strategically. Retailers should regularly monitor key performance indicators like sales growth and customer satisfaction to see how AI is impacting their business. Creating feedback loops by gathering data, assessing performance, and implementing improvements means retailers can use AI for continuous growth.

There’s no doubt that AI has the potential to revolutionise the grocery experience—giving retailers the ability to personalise the shopping experience, streamline their ops, and create new and engaging interactions with customers. As I’ve tried to demonstrate in this article series, however, there’s more to AI than just the technology itself. Only with the right foundations—and a focus on how it can benefit the customers—will retailers succeed in their AI initiatives.