How can customer-centric retailers become AI-ready?

Artificial Intelligence (AI) promises to have a revolutionary impact on the grocery industry. The full extent to which AI will reshape the grocery retail landscape is yet to be seen, but the potential is undeniably exciting. As a result, many retailers are starting to ask how they can reap the rewards.

In this—the first in a new series of articles from Sandra Stanley, dunnhumby’s Chief Data Science Officer—we're looking at why AI is set to be such a big deal, exploring some of the real world benefits it can deliver, and explaining how retailers can get themselves ready for an AI-powered future.
 

 
In the fast-paced world of retail, being customer-centric is key to staying competitive, and AI can help retailers unlock deep customer insights and improve every stage of the shopper journey. However, adopting AI requires a clear strategy and commitment. Here’s how customer-centric retailers can become AI-ready in five steps.

1. Understand what AI can do for customers
   For retailers, AI offers valuable applications that can drive customer satisfaction and loyalty. From personalising recommendations and predicting demand to managing inventory and optimising pricing, AI tools can address critical retail needs. Retailers should evaluate potential AI solutions that align with their customer-centric goals, like enhancing customer experience, boosting engagement, and meeting demand seamlessly.

   Look into AI applications that can improve in-store experiences, optimise online shopping, and create consistent omni-channel journeys. The right AI tools will help you stay aligned with customer needs, foster loyalty, and drive revenue.

2. Gather customer data first
   Data is at the heart of AI. For customer-centric retailers, this means having structured, clean, and accurate customer data. Many retailers have invested in cloud data platforms that that can handle diverse data types, including transactional, behavioural, and social data. By centralising this information, retailers can use AI to analyse shopping patterns, predict needs, and create highly personalised experiences.

   Establish robust data governance and storage practices to protect customer privacy and ensure that data quality remains high. AI can only deliver insights as valuable as the data it’s trained on, so investing in data readiness is a crucial first step.

3. Help employees understand what AI can offer
   Equipping teams with the skills to understand and use AI is essential in a customer-centric retail environment. Start by upskilling employees to understand data insights and AI’s role in enhancing customer interactions. Retailers may also need to bring in specialised talent like data scientists and AI engineers or partner with AI-focused firms to bridge the skill gap. Employees trained in AI can better identify customer trends and translate them into actionable strategies.

   Empowered staff who understand AI’s capabilities are crucial for maximising the benefits of AI, from improving customer service to creating personalised marketing campaigns.

4. Start small, but think big
   Testing AI in small, impactful projects allows retailers to see early results without committing to large-scale investments. Start with pilot programs that have a direct impact on customer experience, like personalised product recommendations, intelligent pricing, or inventory optimisation for high-demand items. For instance, you might use AI to manage stock availability for popular products or test predictive pricing models that align with customer price sensitivity.

   These pilot programs provide quick wins, demonstrate AI’s potential, and build organisational support for further AI adoption. Successful pilots pave the way for more comprehensive AI initiatives focused on customer satisfaction and loyalty.

5. See AI as an ally, not an enemy
   Introducing AI requires a shift in mindset and a willingness to innovate. Retailers should focus on fostering a culture where AI is seen as a tool that enhances customer engagement rather than a disruption. Transparent communication about AI’s role in delivering better customer experiences can help ease any concerns among staff and stakeholders.

   Emphasise how AI can empower employees to focus on more strategic, customer-centric tasks, leaving routine processes to automation. Engage staff early, listen to their concerns, and make it clear that AI is a tool to enhance—not replace—their ability to deliver value to customers. As Nvidia CEO Jensen Huang said, "AI will not take your job. The person who uses AI is going to take your job¹."

By following these steps, customer-centric retailers can become AI-ready—giving them the foundation they need to create memorable, seamless, and satisfying experiences for customers. From understanding AI’s potential to aligning with the human side of change, these actions will set retailers up to lead with innovation while remaining committed to their core goal: meeting and exceeding customer expectations.

In the second part of this series, Sandra takes a look at seven, retail-specific AI use cases—and how forward-thinking retailers can tap into them today.

[1] Is AI going to take your job? Nvidia CEO Jensen Huang responds to Akshay Kumar – Gulf News, 27th October