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GUEST COMMENT Efficiency, efficiency… sustainability: how AI can help retailers achieve both goals

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Every business is striving to be efficient – it’s a vital component to success. In retail, the ability to run an efficient supply chain could have a huge impact on who comes out on top, and who falls by the wayside. In the last few years, retailers have had to completely re-think their supply chains to keep up with consumers’ needs, and the current Covid-19 pandemic has further exacerbated this. For example, an increased volume of online sales has put further pressure on this infrastructure and proposition. To keep pace, retailers are striving for an agile, responsive and efficient supply chain to meet the customer’s need, while also keeping a handle on costs.

At the same time, retailers are also being pushed to become more sustainable. Growing concerns about climate change, resource consumption, waste, clean water and other sustainability issues have brought retailers a whole new level of corporate responsibility to adhere to. Consumers are more conscious about what they are buying and where they are buying from, making sustainability an added consideration for retailers. According to Accenture’s study on corporate sustainability, 71% of CEOs believe that – with increased commitment and action – business can play a critical role in our drive to meet global sustainability goals and targets.

Two birds with one stone

But what is clear is that these aims are aligned: an efficient supply chain is a crucial part of delivering a sustainable operation.

Implementing technology such as artificial intelligence (AI) and machine learning (ML) can help retailers with to achieve both goals by identifying, tracking and controlling their environmental impacts as well as increasing efficiency across the end-to-end supply chain. In fact, almost a quarter of retailers say data science, AI and ML are critical to their success. AI-based tools can help retailers to consider all the complex factors that come into play every day, gather and analyse relevant data, and make the most profitable business decisions which ultimately help them to become sustainable.

The power of AI


By implementing AI and ML, retailers can have peace of mind knowing it can make operations more efficient while also ticking all the right boxes when it comes to sustainability. Here are some key examples of how retailers can put AI into practice:

AI can help with demand forecasting

By considering hundreds of different forecast factors such as weather, day of the week or time of the year, retailers can now significantly improve their accuracy when it comes to predicting customers’ needs. This not only makes retailers more efficient and improves their bottom line but can help to minimise waste at the same time.

AI can improve availability

By understanding the risk of lost sales and wastage, retailers can ensure the right balance when managing inventory – individually for every item in every store. This makes the stock-ordering process a less labour-intensive task and can improve shelf presentation, while also cutting food waste.

AI can also help to set the right price

Retailers need to find the right balance between selling at a profit and clearing stock that’s going out of date, and AI can make a real difference in this process by automatically setting prices based on information such as time of day, amount of goods left and expiry date. By gradually reducing items rather than following rigid markdown procedures, they can boost profitability and ensure products sell, allowing them to operate efficiently and sustainably.

AI can respond and react to transport disruption

By analysing a range of factors including weather, time of day and expiration date of products, AI and ML can also advise retailers how to react to potential transport disruptions or help to avoid them altogether. For example, if rough seas could potentially lead to a port being closed, ML can help retailers navigate the problem by advising another route to take. This is crucial as a delay to a boatful of vegetables arriving could lead to them having a shorter shelf life, or even perishing before they reach the store. Avoiding these kinds of logistical problems helps with efficiency while also dramatically cutting waste, ultimately helping retailers to increase profits.

A harmonious partnership 

It’s no surprise that every retailer is looking for ways to boost efficiency – helping them to keep pace with demand and remain competitive, especially in these challenging times. By using AI to become efficient, retailers can also satisfy the growing demand to act more sustainably, as the two go hand in hand. If they can emerge more efficient and sustainable, retailers can be confident that they are laying the foundations for future success. 

Wayne Snyder is vice president, retail industry strategy EMEA at Blue Yonder

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