AI in retail redefining future by idc, Gen AI
manoj649527
66 views
43 slides
Feb 28, 2025
Slide 1 of 43
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
About This Presentation
AI in retail , redefining future by idc
Slide Content
AI in Retail:
Redefining the Future
Transforming Merchandising,
Omnichannel, Supply Chains,
and Sustainability Practices
Jordan Speer
Research Director,
Worldwide Retail Product Sourcing, Fulfillment,
and Sustainability Strategies, IDC
Leslie Hand
Group Vice President,
IDC Retail and Financial Insights, IDC
Ananda Chakravarty
Research Vice President,
Retail Merchandising and Marketing
Analytics Strategies, IDC
InfoBrief, sponsored by SAP | July 2024
Redefining the Future
Transforming Merchandising,
Omnichannel, Supply Chains,
and Sustainability Practices
Jordan Speer
Research Director,
Worldwide Retail Product Sourcing, Fulfillment,
and Sustainability Strategies, IDC
Leslie Hand
Group Vice President,
IDC Retail and Financial Insights, IDC
Ananda Chakravarty
Research Vice President,
Retail Merchandising and Marketing
Analytics Strategies, IDC
InfoBrief, sponsored by SAP | July 2024
2InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224
AI in Retail: Redefining the Future
Table of Contents
CLICK BELOW TO NAVIGATE TO EACH SECTION IN THIS DOCUMENT.
In This InfoBrief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1: Data-Driven Merchandising Excellence
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Marketing and Merchandising Are Growing Together. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Merchandising Must Be Agile, Holistic, and Comprehensive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Data- and AI-Driven Merchandising Is the Golden Ticket to Profitability. . . . . . . . . . . . . . . . . 9
Merchandising Is a Continuous Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2: AI-Powered Omnichannel Retail Experience
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Omnichannel Experiences Are the Norm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Consumers Will Abandon Retailers That Lag in Providing
an Omnichannel Experience
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Seamless and Personalized Shopping Across All Channels
Starts with Data and Insight
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Omnichannel Investment Offers a High Return on Investment. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Always Put Customers First by Prioritizing Omnichannel Experiences. . . . . . . . . . . . . . . . . . 19
3: Boosting Supply Chain Resilience with AI
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Retail Requires Supply Chain Resilience. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Provide Modern IT, Diversity, and Flexibility to Enable a Resilient Supply Chain. . . . . . . .23
Understand the Risks and Make Smart Investments in the Right Technologies. . . . . . . . 24
Reap the Benefits of a Resilient Supply Chain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Resilience Only Works if It’s Enabled Before Disruption Occurs. . . . . . . . . . . . . . . . . . . . . . . .27
4: Championing Sustainable Innovation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Consumers, Community, Competition, and Costs Drive Retailers to Focus
on End-to-End Sustainability
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Retailers Set Goals to Optimize Inventory and Reduce Energy, Packaging,
and Water Consumption for Improved Sustainability
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sustainable Retail Practices Prioritize Efficient Operations and Waste Reduction. . . . . . .34
Sustainable Retail Requires a Holistic Mindset and Bite-Sized Actions. . . . . . . . . . . . . . . . 35
Key Takeaways. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Essential Guidance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Appendix: Supplemental Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
About the IDC Analysts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Message from the Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Table of Contents
CLICK BELOW TO NAVIGATE TO EACH SECTION IN THIS DOCUMENT.
July 2024 | IDC #US52342224
AI in Retail: Redefining the Future
Table of Contents
CLICK BELOW TO NAVIGATE TO EACH SECTION IN THIS DOCUMENT.
In This InfoBrief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1: Data-Driven Merchandising Excellence
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Marketing and Merchandising Are Growing Together. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Merchandising Must Be Agile, Holistic, and Comprehensive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Data- and AI-Driven Merchandising Is the Golden Ticket to Profitability. . . . . . . . . . . . . . . . . 9
Merchandising Is a Continuous Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2: AI-Powered Omnichannel Retail Experience
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Omnichannel Experiences Are the Norm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Consumers Will Abandon Retailers That Lag in Providing
an Omnichannel Experience
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Seamless and Personalized Shopping Across All Channels
Starts with Data and Insight
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Omnichannel Investment Offers a High Return on Investment. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Always Put Customers First by Prioritizing Omnichannel Experiences. . . . . . . . . . . . . . . . . . 19
3: Boosting Supply Chain Resilience with AI
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Retail Requires Supply Chain Resilience. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Provide Modern IT, Diversity, and Flexibility to Enable a Resilient Supply Chain. . . . . . . .23
Understand the Risks and Make Smart Investments in the Right Technologies. . . . . . . . 24
Reap the Benefits of a Resilient Supply Chain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Resilience Only Works if It’s Enabled Before Disruption Occurs. . . . . . . . . . . . . . . . . . . . . . . .27
4: Championing Sustainable Innovation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Consumers, Community, Competition, and Costs Drive Retailers to Focus
on End-to-End Sustainability
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Retailers Set Goals to Optimize Inventory and Reduce Energy, Packaging,
and Water Consumption for Improved Sustainability
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sustainable Retail Practices Prioritize Efficient Operations and Waste Reduction. . . . . . .34
Sustainable Retail Requires a Holistic Mindset and Bite-Sized Actions. . . . . . . . . . . . . . . . 35
Key Takeaways. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Essential Guidance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Appendix: Supplemental Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
About the IDC Analysts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Message from the Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Table of Contents
CLICK BELOW TO NAVIGATE TO EACH SECTION IN THIS DOCUMENT.
3InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
Today’s omnichannel retailers face a complex
array of pressures.
Customers demand personalized and seamless shopping journeys
across channels, flexible payment/checkout choices, and multiple
fulfillment options while wanting to do business with
responsible, trusted retailers that are improving
the sustainability of their operations.
Maintaining customer loyalty while
investing in end-to-end (E2E) supply
chain enhancement from planning
to product end of life are top
priorities. Retail organizations are
at an inflection point and must
invest in technology to maintain a
competitive edge amid heightened
consumer expectations, a tight labor
market, and even tighter margins.
In This InfoBrief
This IDC InfoBrief centers on how retailers
invest in technology to thrive in the era
of omnichannel commerce.
It describes in
four chapters how retailers are bolstering
customer centricity, championing sustainability,
fostering innovation, and enhancing operational
efficiency by making informed decisions
through data analysis and effectively navigating
the intricate dynamics of the retail landscape.
To support this research, IDC leveraged
various IDC industry and IT surveys,
as well as anecdotal evidence based on
conversations and dedicated research.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
Today’s omnichannel retailers face a complex
array of pressures.
Customers demand personalized and seamless shopping journeys
across channels, flexible payment/checkout choices, and multiple
fulfillment options while wanting to do business with
responsible, trusted retailers that are improving
the sustainability of their operations.
Maintaining customer loyalty while
investing in end-to-end (E2E) supply
chain enhancement from planning
to product end of life are top
priorities. Retail organizations are
at an inflection point and must
invest in technology to maintain a
competitive edge amid heightened
consumer expectations, a tight labor
market, and even tighter margins.
In This InfoBrief
This IDC InfoBrief centers on how retailers
invest in technology to thrive in the era
of omnichannel commerce.
It describes in
four chapters how retailers are bolstering
customer centricity, championing sustainability,
fostering innovation, and enhancing operational
efficiency by making informed decisions
through data analysis and effectively navigating
the intricate dynamics of the retail landscape.
To support this research, IDC leveraged
various IDC industry and IT surveys,
as well as anecdotal evidence based on
conversations and dedicated research.
4InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
1
⊲Omnichannel consumer-centric experiences in shopping,
fulfillment, and service have become the norm as consumers
seek personalized convenience.
⊲The most digitally mature and sustainable retailers
are enhancing the omnichannel experience
from discovery to last mile while strengthening a secure,
digital infrastructure to improve their resilience and
competitive advantage from product conception to end of life.
⊲Successful retailers embrace data-driven, AI-enabled,
cloud-first cultures
focused on profitable growth and
use data to drive pricing, promotion, assortment, and other
merchandising strategies (or omnichannel strategies).
⊲AI requires the right data foundation. Digital infrastructure
must extend from the store through the supply chain —
into the chief merchant’s office — and through every channel
where a consumer wants to engage.
Executive Summary
2
3
AI-enabled and data driven end-to-end
supply chains are resilient.
4
Sustainable retail practices prioritize
efficient operations and waste reduction.
Retailers are embracing technology to become more resilient and seize competitive advantage.
Marketing and merchandising are growing
together, unlocking benefits of AI.
Omnichannel is the norm.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
1
⊲Omnichannel consumer-centric experiences in shopping,
fulfillment, and service have become the norm as consumers
seek personalized convenience.
⊲The most digitally mature and sustainable retailers
are enhancing the omnichannel experience
from discovery to last mile while strengthening a secure,
digital infrastructure to improve their resilience and
competitive advantage from product conception to end of life.
⊲Successful retailers embrace data-driven, AI-enabled,
cloud-first cultures
focused on profitable growth and
use data to drive pricing, promotion, assortment, and other
merchandising strategies (or omnichannel strategies).
⊲AI requires the right data foundation. Digital infrastructure
must extend from the store through the supply chain —
into the chief merchant’s office — and through every channel
where a consumer wants to engage.
Executive Summary
2
3
AI-enabled and data driven end-to-end
supply chains are resilient.
4
Sustainable retail practices prioritize
efficient operations and waste reduction.
Retailers are embracing technology to become more resilient and seize competitive advantage.
Marketing and merchandising are growing
together, unlocking benefits of AI.
Omnichannel is the norm.
5InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI in Retail: Redefining the Future
1
Data-Driven Merchandising
Excellence
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI in Retail: Redefining the Future
1
Data-Driven Merchandising
Excellence
6InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Marketing and Merchandising
Are Growing Together
Data and insights drive profitability in merchandising.
Merchandise
Financial
Planning
Space and
Assortment
Planning
Sales and
Operational
Planning
Marketing
Inventory
Management
and Visibility
Capacity
Planning
Corporate
Strategy
Price
Optimization and
Management
Demand
Forecast
DATA
D
A
T
A
D
A
T
A
DATA
Merchandising bifurcates planning and execution:
⊲Merchants rely on ad hoc and seasonal planning to execute
plans with initiatives such as planogramming, financial plans,
price optimization, campaign management, and inventory visibility.
⊲Centralized demand forecasting and planning is critical to
merchandise planning and execution. AI introduces new
efficiencies in forecasting.
Merchandise processes are becoming more holistic:
⊲Full-suite, end-to-end platforms are becoming more attractive
by consolidating a single data source across multiple retail
efficiencies. Planning key functions sets the operations stage and
decreases costs and complexity while increasing revenue.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Marketing and Merchandising
Are Growing Together
Data and insights drive profitability in merchandising.
Merchandise
Financial
Planning
Space and
Assortment
Planning
Sales and
Operational
Planning
Marketing
Inventory
Management
and Visibility
Capacity
Planning
Corporate
Strategy
Price
Optimization and
Management
Demand
Forecast
DATA
D
A
T
A
D
A
T
A
DATA
Merchandising bifurcates planning and execution:
⊲Merchants rely on ad hoc and seasonal planning to execute
plans with initiatives such as planogramming, financial plans,
price optimization, campaign management, and inventory visibility.
⊲Centralized demand forecasting and planning is critical to
merchandise planning and execution. AI introduces new
efficiencies in forecasting.
Merchandise processes are becoming more holistic:
⊲Full-suite, end-to-end platforms are becoming more attractive
by consolidating a single data source across multiple retail
efficiencies. Planning key functions sets the operations stage and
decreases costs and complexity while increasing revenue.
7InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Marketing and Merchandising
Are Growing Together
(continued)
Displaying
Promoting
Selling
Allocation and
Replenishing
Auditing
Buying,
Purchasing,
Sourcing
DATA
D
A
T
A
D
A
T
A
DATA
Data-driven decision-making is becoming ubiquitous:
⊲Merchandisers must curate data sets due to high volumes
of collected data. Powerful interpretation and orchestration
tools across merchandising are critical for next-generation
merchants to drive margins and lower costs.
⊲Merchandising is synchronizing with retail marketing
to improve CX and depending even more on consolidated,
clean, and consistent data.
⊲AI has become a key driver enabling curation at mass scale.
Merchandise execution relies on compliance:
⊲Commerce, regional, and store-level granularity can now
be built into buying, allocations, or promotions to help stores
optimize revenue gain and avoid stockouts or oversupply.
Enforcing centralized buying, allocation, and demand-shaping
policy locks in gains.
Merchandising
Execution
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Marketing and Merchandising
Are Growing Together
(continued)
Displaying
Promoting
Selling
Allocation and
Replenishing
Auditing
Buying,
Purchasing,
Sourcing
DATA
D
A
T
A
D
A
T
A
DATA
Data-driven decision-making is becoming ubiquitous:
⊲Merchandisers must curate data sets due to high volumes
of collected data. Powerful interpretation and orchestration
tools across merchandising are critical for next-generation
merchants to drive margins and lower costs.
⊲Merchandising is synchronizing with retail marketing
to improve CX and depending even more on consolidated,
clean, and consistent data.
⊲AI has become a key driver enabling curation at mass scale.
Merchandise execution relies on compliance:
⊲Commerce, regional, and store-level granularity can now
be built into buying, allocations, or promotions to help stores
optimize revenue gain and avoid stockouts or oversupply.
Enforcing centralized buying, allocation, and demand-shaping
policy locks in gains.
Merchandising
Execution
8InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Retailers must ensure
both product availability
and operational agility
to execute their decisions
(e.g., moving inventory
and adjusting promotions
at the store level).
n = 840 (global); Source: IDC’s Global Retail Operating Models Survey, July 2023
Merchandising Must Be Agile, Holistic,
and Comprehensive
Top Challenges Impacting Merchandising
If we had unlimited resources,
we’d be looking at system
connectivity and data integration.”
We need a holistic view across
merchant teams.”
We have to be agile, but some
of our processes don’t allow
for that.”
Multibillion-dollar general
merchandise retailer
Making actions
smart and proactive
Turning insight
into action
Orchestration across
merchandising functions
will require a single
data source and powerful
orchestration tools.
Timely reaction to
changing customer
demands, flexibility
in seasonality, and
merchandising for
retail competition.
Decision-making requires
advanced curation tools
because of merchants,
and planners’ data volume
and complexity.
Turning data
into insights
Using tech to
manage data
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Retailers must ensure
both product availability
and operational agility
to execute their decisions
(e.g., moving inventory
and adjusting promotions
at the store level).
n = 840 (global); Source: IDC’s Global Retail Operating Models Survey, July 2023
Merchandising Must Be Agile, Holistic,
and Comprehensive
Top Challenges Impacting Merchandising
If we had unlimited resources,
we’d be looking at system
connectivity and data integration.”
We need a holistic view across
merchant teams.”
We have to be agile, but some
of our processes don’t allow
for that.”
Multibillion-dollar general
merchandise retailer
Making actions
smart and proactive
Turning insight
into action
Orchestration across
merchandising functions
will require a single
data source and powerful
orchestration tools.
Timely reaction to
changing customer
demands, flexibility
in seasonality, and
merchandising for
retail competition.
Decision-making requires
advanced curation tools
because of merchants,
and planners’ data volume
and complexity.
Turning data
into insights
Using tech to
manage data
9InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Data- and AI-Driven Merchandising
Is the Golden Ticket to Profitability
Retail Merchandise Planning Benefits
If we have a [good] assortment
and we’re beating our
competitors on price, then
that’s a recipe for successful
merchandising.”
Price optimization, financial
planning, and inventory planning
are huge impact points for us.
Our inventory planning team is
always optimizing our buys.”
Multibillion-dollar general
merchandise retailer
Price
Optimization
Capacity Planning:
Labor
Inventory
Management:
Out of Stock (OOS)
Sales and
Operational
Planning
Capacity Planning:
Operations
Space and
Assortment
Planning
Increased
revenue
Decreased
costs
Increased
productivity
Increased
loss avoidance
Increased
revenue
Increased
customer satisfaction
Increased
revenue
Inventory
Management:
Surplus
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Data- and AI-Driven Merchandising
Is the Golden Ticket to Profitability
Retail Merchandise Planning Benefits
If we have a [good] assortment
and we’re beating our
competitors on price, then
that’s a recipe for successful
merchandising.”
Price optimization, financial
planning, and inventory planning
are huge impact points for us.
Our inventory planning team is
always optimizing our buys.”
Multibillion-dollar general
merchandise retailer
Price
Optimization
Capacity Planning:
Labor
Inventory
Management:
Out of Stock (OOS)
Sales and
Operational
Planning
Capacity Planning:
Operations
Space and
Assortment
Planning
Increased
revenue
Decreased
costs
Increased
productivity
Increased
loss avoidance
Increased
revenue
Increased
customer satisfaction
Increased
revenue
Inventory
Management:
Surplus
10InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Merchandising Execution Initiatives and Outcomes
Data- and AI-Driven Merchandising
Is the Golden Ticket to Profitability
(continued)
Outcomes
⊲More than 5% growth in comparative sales
⊲90% fulfillment via omniplatform
⊲Higher-margin products, higher average
order value
⊲Increase in unique customers,
loyalty program members
EXAMPLE: Multibillion-Dollar Retailer
Note: Estimates are subject to business maturity, the retail business model, the type of retail vertical, and independent business operations.
Initiatives
⊲AI-driven predictive analytics
⊲Price and promotion optimization
⊲Consumer sentiment data collection
⊲Social media data analytics
⊲Customer data platform
⊲Demand forecasting
⊲Data-driven personalization
⊲Cross-functional centralized data
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Merchandising Execution Initiatives and Outcomes
Data- and AI-Driven Merchandising
Is the Golden Ticket to Profitability
(continued)
Outcomes
⊲More than 5% growth in comparative sales
⊲90% fulfillment via omniplatform
⊲Higher-margin products, higher average
order value
⊲Increase in unique customers,
loyalty program members
EXAMPLE: Multibillion-Dollar Retailer
Note: Estimates are subject to business maturity, the retail business model, the type of retail vertical, and independent business operations.
Initiatives
⊲AI-driven predictive analytics
⊲Price and promotion optimization
⊲Consumer sentiment data collection
⊲Social media data analytics
⊲Customer data platform
⊲Demand forecasting
⊲Data-driven personalization
⊲Cross-functional centralized data
11InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Merchandising Is a Continuous Process
Merchandising never stops — customer sales are the prize.
⊲Build merchandising excellence by seamlessly integrating planning
and execution components.
⊲Orchestration is the linchpin across merchandising functions;
make sure to commit resources for a solid foundation.
⊲Improving data, analytics, and demand planning will improve
all merchandise capabilities while driving profitability.
⊲Reimagine processes across retail merchants, planners,
and pricing leaders for collaboration across merchandising.
⊲Leverage advanced toolsets such as AI for automation and
integration — AI can automate complex data structures
and map data, products, and processes for easier integration.
⊲Balance merchandising capabilities across a strong customer
experience and sales to yield optimal results.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Merchandising Is a Continuous Process
Merchandising never stops — customer sales are the prize.
⊲Build merchandising excellence by seamlessly integrating planning
and execution components.
⊲Orchestration is the linchpin across merchandising functions;
make sure to commit resources for a solid foundation.
⊲Improving data, analytics, and demand planning will improve
all merchandise capabilities while driving profitability.
⊲Reimagine processes across retail merchants, planners,
and pricing leaders for collaboration across merchandising.
⊲Leverage advanced toolsets such as AI for automation and
integration — AI can automate complex data structures
and map data, products, and processes for easier integration.
⊲Balance merchandising capabilities across a strong customer
experience and sales to yield optimal results.
12InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Merchandising Is a Continuous Process (continued)
Source: IDC’s Global Retail Operating Models Survey, July 2023
25%
of retailers are using advanced data
analytics and AI
as part of an integrated,
holistic merchandising solution.
40%
of retailers state that they need to
integrate inventory data across
multiple channels
for a single view
of their inventory.
Sales is the key metric.
Without merchandising,
no one gets paid.”
Major North American apparel retailer
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 1 | DATAflDRIVEN MERCHANDISINGfiEXCELLENCE Chapter 4Chapter 3Chapter 2Chapter 1
Merchandising Is a Continuous Process (continued)
Source: IDC’s Global Retail Operating Models Survey, July 2023
25%
of retailers are using advanced data
analytics and AI
as part of an integrated,
holistic merchandising solution.
40%
of retailers state that they need to
integrate inventory data across
multiple channels
for a single view
of their inventory.
Sales is the key metric.
Without merchandising,
no one gets paid.”
Major North American apparel retailer
13InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
2
AI-Powered Omnichannel
Retail Experience
AI in Retail: Redefining the Future
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
2
AI-Powered Omnichannel
Retail Experience
AI in Retail: Redefining the Future
14InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Omnichannel shopping is persistent. In the United States,
ecommerce comprises approximately
15% of total retail sales
quarter after quarter.
The acceleration of omnichannel shopping has
provided new opportunities for retailers
to create
engaging shopping and fulfillment
experiences for consumers.
These expectations also present a significant
challenge to retailers in fulfilling orders
across a wide range of channels and
service levels.
Omnichannel Experiences Are the Norm
Retailers are embracing technology to become more resilient and seize competitive advantage.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Omnichannel shopping is persistent. In the United States,
ecommerce comprises approximately
15% of total retail sales
quarter after quarter.
The acceleration of omnichannel shopping has
provided new opportunities for retailers
to create
engaging shopping and fulfillment
experiences for consumers.
These expectations also present a significant
challenge to retailers in fulfilling orders
across a wide range of channels and
service levels.
Omnichannel Experiences Are the Norm
Retailers are embracing technology to become more resilient and seize competitive advantage.
15InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
47%
55%
45%
41%
48%
46% 46%45%
49%
35%
43%
27% 27%
31%
29%
32%
25%
19%
Ability to shop
online or
in store with the
same retailer
Flexibility to return
purchases made
in store or online
to either channel
Consumers Will Abandon Retailers That Lag
in Providing an Omnichannel Experience
A high percentage of consumers is likely or very likely to go elsewhere if these services do not meet their expectations.
IDC’s Consumer Sentiment Survey, August 2022
n = 800 (retailers); Source: IDC’s Global Retail Operating Models Survey, August 2022, n = 1,010 (consumers); Source: IDC’s Consumer Sentiment Survey, July 2022. | For an accessible version of the data on this page, see Supplemental Data in the Appendix.
Option to buy
online and pick
up from self-service
lockers
Ability to buy
online and
pick up in store
(BOPIS)
Online visibility into
available inventory,
costs, and location
before buying
Option to buy
online and add to
order when
picking up curbside
Offer same-day
delivery when
buying online
Option to buy
online and pick
up curbside
Option to
reserve online
and pick up
in store (ROPIS)
■ Services retailers prioritize for consumers ■ Consumers likely or very likely to select a different retailer if services are not offered
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
47%
55%
45%
41%
48%
46% 46%45%
49%
35%
43%
27% 27%
31%
29%
32%
25%
19%
Ability to shop
online or
in store with the
same retailer
Flexibility to return
purchases made
in store or online
to either channel
Consumers Will Abandon Retailers That Lag
in Providing an Omnichannel Experience
A high percentage of consumers is likely or very likely to go elsewhere if these services do not meet their expectations.
IDC’s Consumer Sentiment Survey, August 2022
n = 800 (retailers); Source: IDC’s Global Retail Operating Models Survey, August 2022, n = 1,010 (consumers); Source: IDC’s Consumer Sentiment Survey, July 2022. | For an accessible version of the data on this page, see Supplemental Data in the Appendix.
Option to buy
online and pick
up from self-service
lockers
Ability to buy
online and
pick up in store
(BOPIS)
Online visibility into
available inventory,
costs, and location
before buying
Option to buy
online and add to
order when
picking up curbside
Offer same-day
delivery when
buying online
Option to buy
online and pick
up curbside
Option to
reserve online
and pick up
in store (ROPIS)
■ Services retailers prioritize for consumers ■ Consumers likely or very likely to select a different retailer if services are not offered
16InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Retailers should streamline
customer journeys
across product search,
payment, delivery,
and customer service.
n = 840 (global); Source: IDC’s Global Retail Operating Models Survey, July 2023
Seamless and Personalized Shopping Across
All Channels Starts with Data and Insight
Customer Experience: The Top 4 Retail Omnichannel Challenges
CHALLENGES FOR RETAILERS:
Impediments to progress include
lagging business strategy,
ROI, a lack of technology support
models, and concern about
business effort/disruption.”
Midsize grocery retailer
It was so hard — data was all over
the place, but when we were
done, new integrations required
less effort, and we could leverage
models that enable configurable
options to be implemented.”
Progressive fashion retailer
Back-end
and front-end
integration
32%
Eliminating
friction points
33%
Retailers must revamp
their traditional approach
to loyalty to retain
today’s customers.
Customers expect visibility
over inventory across
channels, which requires
a deep integration.
Achieving and leveraging
a 360-degree view of
customers for a customer
experience (CX)
personalization strategy
are key.
Generating
loyalty
31%
Customer data
quality
30%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Retailers should streamline
customer journeys
across product search,
payment, delivery,
and customer service.
n = 840 (global); Source: IDC’s Global Retail Operating Models Survey, July 2023
Seamless and Personalized Shopping Across
All Channels Starts with Data and Insight
Customer Experience: The Top 4 Retail Omnichannel Challenges
CHALLENGES FOR RETAILERS:
Impediments to progress include
lagging business strategy,
ROI, a lack of technology support
models, and concern about
business effort/disruption.”
Midsize grocery retailer
It was so hard — data was all over
the place, but when we were
done, new integrations required
less effort, and we could leverage
models that enable configurable
options to be implemented.”
Progressive fashion retailer
Back-end
and front-end
integration
32%
Eliminating
friction points
33%
Retailers must revamp
their traditional approach
to loyalty to retain
today’s customers.
Customers expect visibility
over inventory across
channels, which requires
a deep integration.
Achieving and leveraging
a 360-degree view of
customers for a customer
experience (CX)
personalization strategy
are key.
Generating
loyalty
31%
Customer data
quality
30%
17InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Omnichannel Investment Offers
a High Return on Investment
Investments in omnichannel pay dividends to employee and customer satisfaction
and the bottom line.
Unifying customer data, optimizing
inventory management, and offering
flexible order fulfillment options enhance
customer satisfaction, increase efficiency,
and position the business for long-term
success in the competitive retail industry.
It was a celebration when we could see
customers in a single view. We were
empowered to build new strategies to
connect loyalty [and] omnichannel customer
apps across three divisions globally.”
Fashion retailer
Top benefits of intelligence investments in commerce
and the customer experience
37%
Improved employee
effectiveness
36%
Improved business planning
and forecasting
37%
Improved security/
loss reduction
36%
Improved
customer satisfaction
37%
Increased
operational agility
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Omnichannel Investment Offers
a High Return on Investment
Investments in omnichannel pay dividends to employee and customer satisfaction
and the bottom line.
Unifying customer data, optimizing
inventory management, and offering
flexible order fulfillment options enhance
customer satisfaction, increase efficiency,
and position the business for long-term
success in the competitive retail industry.
It was a celebration when we could see
customers in a single view. We were
empowered to build new strategies to
connect loyalty [and] omnichannel customer
apps across three divisions globally.”
Fashion retailer
Top benefits of intelligence investments in commerce
and the customer experience
37%
Improved employee
effectiveness
36%
Improved business planning
and forecasting
37%
Improved security/
loss reduction
36%
Improved
customer satisfaction
37%
Increased
operational agility
18InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
n = 840 (global); Source: IDC’s Global Retail Operating Models Survey, July 2023
Omnichannel Investment Offers
a High Return on Investment
(continued)
The top omnichannel customer experience technologies
will be implemented in the next three years.
40%
Customized last-mile delivery/fulfillment options (e.g., drive-through/curbside pickup capabilities)
40%
Personalized customer boards (timeline view of curated goods that have been purchased and new purchase recommendations)
38%
Customer journey analytics and identity management software
37%
Customer relationship management (CRM) and customer service tools
36%
Content management software
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
n = 840 (global); Source: IDC’s Global Retail Operating Models Survey, July 2023
Omnichannel Investment Offers
a High Return on Investment
(continued)
The top omnichannel customer experience technologies
will be implemented in the next three years.
40%
Customized last-mile delivery/fulfillment options (e.g., drive-through/curbside pickup capabilities)
40%
Personalized customer boards (timeline view of curated goods that have been purchased and new purchase recommendations)
38%
Customer journey analytics and identity management software
37%
Customer relationship management (CRM) and customer service tools
36%
Content management software
19InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Always Put Customers First by Prioritizing
Omnichannel Experiences
Various omnichannel solutions exist, but they can rarely be implemented soon enough.
Retailer Tips for Making Omnichannel a Reality
⊲Set clear objectives. Organizational priorities vary from company to company,
so job number 1 is understanding what you need to do to improve customer
loyalty and satisfaction.
⊲Data is becoming more important to future success, so get your “data house”
in order today.
⊲Leverage data platforms and integration tools that ease innovation
and improve resilience.
⊲Make sure that IT and the business are aligned from day 1, from strategic
brainstorming to the run/operate phases.
Always put the customer
first — putting customers first
makes things so easy.”
Progressive fashion retailer
It hurts me a lot that we aren’t
omni yet.”
Midsize grocery retailer
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 2 | AIflPOWERED OMNICHANNEL RETAIL EXPERIENCE Chapter 4Chapter 3Chapter 2Chapter 1
Always Put Customers First by Prioritizing
Omnichannel Experiences
Various omnichannel solutions exist, but they can rarely be implemented soon enough.
Retailer Tips for Making Omnichannel a Reality
⊲Set clear objectives. Organizational priorities vary from company to company,
so job number 1 is understanding what you need to do to improve customer
loyalty and satisfaction.
⊲Data is becoming more important to future success, so get your “data house”
in order today.
⊲Leverage data platforms and integration tools that ease innovation
and improve resilience.
⊲Make sure that IT and the business are aligned from day 1, from strategic
brainstorming to the run/operate phases.
Always put the customer
first — putting customers first
makes things so easy.”
Progressive fashion retailer
It hurts me a lot that we aren’t
omni yet.”
Midsize grocery retailer
20InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI in Retail: Redefining the Future
3
Boosting Supply Chain
Resilience with AI
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI in Retail: Redefining the Future
3
Boosting Supply Chain
Resilience with AI
21InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Retail Requires Supply Chain Resilience
Data- and AI-driven retail supply chains are more agile, continually adapting to consumer
demand. Supply chains can achieve resilience by becoming more:
“Our goal is to reduce inventories across
the globe while diversifying distribution to
be closer to the consumer.”
Vice President of Procurement at a global specialty
apparel retailer
“You have to get humans to stop
making decisions. Let the data speak
for itself.”
Head of Business IT at a large apparel and
consumer goods retailer
Efficient and balanced
The holy grail hasn’t changed, but the
stakes are higher when it comes to getting
the right inventory to the right place at
the right time profitably and sustainably.
Omnichannel supply chains must allocate
and move products efficiently across
the supply chain in response to demand
and focus on eliminating oversupply
and stockouts.
Data driven
With accurate and real-time data,
retailers can identify demand
fluctuations, potential bottlenecks,
and supply chain risks. Data-driven
decisions enable retailers to
optimize inventory, adjust scheduling,
and allocate resources efficiently
to mitigate disruptions before they
impact operations.
Automated
AI can harness this data to
automate processes without
requiring human intervention,
such as automating supplier
selection and procurement,
forecasting order exits and
deliveries, and creating the most
efficient and sustainable
trucking and last-mile routes.
n = 377 (retail); Source: IDC’s Supply Chain Survey, April 2024
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Retail Requires Supply Chain Resilience
Data- and AI-driven retail supply chains are more agile, continually adapting to consumer
demand. Supply chains can achieve resilience by becoming more:
“Our goal is to reduce inventories across
the globe while diversifying distribution to
be closer to the consumer.”
Vice President of Procurement at a global specialty
apparel retailer
“You have to get humans to stop
making decisions. Let the data speak
for itself.”
Head of Business IT at a large apparel and
consumer goods retailer
Efficient and balanced
The holy grail hasn’t changed, but the
stakes are higher when it comes to getting
the right inventory to the right place at
the right time profitably and sustainably.
Omnichannel supply chains must allocate
and move products efficiently across
the supply chain in response to demand
and focus on eliminating oversupply
and stockouts.
Data driven
With accurate and real-time data,
retailers can identify demand
fluctuations, potential bottlenecks,
and supply chain risks. Data-driven
decisions enable retailers to
optimize inventory, adjust scheduling,
and allocate resources efficiently
to mitigate disruptions before they
impact operations.
Automated
AI can harness this data to
automate processes without
requiring human intervention,
such as automating supplier
selection and procurement,
forecasting order exits and
deliveries, and creating the most
efficient and sustainable
trucking and last-mile routes.
n = 377 (retail); Source: IDC’s Supply Chain Survey, April 2024
22InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Retail Requires Supply Chain Resilience (continued)
Supply chains can achieve resilience by becoming more:
n = 377 (retail); Source: IDC’s Supply Chain Survey, April 2024
“We need to think about operating an entire ecosystem.”
Head of Sustainability at a global consumer goods retailer
“Speed and efficiency go hand in
hand with sustainability.”
Head of Business IT at a large apparel and
consumer goods retailer
Transparent and visible
from end to end
With visibility across the E2E
supply chain, retailers can
track and trace products
from source to store,
enabling better compliance,
improving collaboration
with partners and suppliers,
and quickly responding to
challenges or opportunities.
Continuously improving
foundations
AI can unlock opportunities in the supply chain
by making decisions based on enterprisewide
and external data and continually learning
from the outcomes to improve performance
across functional areas. As trust in data
increases, operating models will move beyond
providing insights to automating decision-
making at the core. Because it spans functions
internally and externally, AI will become
the foundation of more standardized practices
across the supply chain.
Sustainable
Sustainability does not live
outside of operations —
it must be built into them not
only to eliminate waste and
create efficiency but also to
enable collaboration and smart
thinking across end-to-end
global supply chains.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Retail Requires Supply Chain Resilience (continued)
Supply chains can achieve resilience by becoming more:
n = 377 (retail); Source: IDC’s Supply Chain Survey, April 2024
“We need to think about operating an entire ecosystem.”
Head of Sustainability at a global consumer goods retailer
“Speed and efficiency go hand in
hand with sustainability.”
Head of Business IT at a large apparel and
consumer goods retailer
Transparent and visible
from end to end
With visibility across the E2E
supply chain, retailers can
track and trace products
from source to store,
enabling better compliance,
improving collaboration
with partners and suppliers,
and quickly responding to
challenges or opportunities.
Continuously improving
foundations
AI can unlock opportunities in the supply chain
by making decisions based on enterprisewide
and external data and continually learning
from the outcomes to improve performance
across functional areas. As trust in data
increases, operating models will move beyond
providing insights to automating decision-
making at the core. Because it spans functions
internally and externally, AI will become
the foundation of more standardized practices
across the supply chain.
Sustainable
Sustainability does not live
outside of operations —
it must be built into them not
only to eliminate waste and
create efficiency but also to
enable collaboration and smart
thinking across end-to-end
global supply chains.
23InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Retailers need suppliers or
partners that can adapt to changing
requirements. They need E2E
visibility into inventory across the
supply chain for store-level planning
and allocation execution in a
complex omnichannel environment.
To be predictive instead of reactive,
retailers require modern IT to
become flexible based on insights
at scale. The ability to implement
changes quickly and close to the
market is a must.
Moving away from sole
sourcing by diversifying
across manufacturing,
logistics, and transportation
is key to resiliency.
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Provide Modern IT, Diversity, and Flexibility
to Enable a Resilient Supply Chain
Supply Chain Disruptions: Top Challenges to Responding EffectivelyTop priorities for retail supply
chains in the next 12 months:
21%
Reduce costs, eliminate
waste, drive efficiency
20%
Continue to modernize/
update IT-related supply
chain infrastructure
20%
Improve supply chain
resilience
20%
Modify / redesign existing
products to improve
supply chain availability
Retailers must reduce
the time and work needed
to get data where it
needs to go and into the
right hands.
Focus on
cost-efficiency
at the expense
of resilience
30%
Supply chain
partner constraints
34%
IT systems
dominated by
legacy/on-premises
applications
33%
Investment
in disparate
process/vendor
applications versus
aligning across
key platforms
21%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Retailers need suppliers or
partners that can adapt to changing
requirements. They need E2E
visibility into inventory across the
supply chain for store-level planning
and allocation execution in a
complex omnichannel environment.
To be predictive instead of reactive,
retailers require modern IT to
become flexible based on insights
at scale. The ability to implement
changes quickly and close to the
market is a must.
Moving away from sole
sourcing by diversifying
across manufacturing,
logistics, and transportation
is key to resiliency.
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Provide Modern IT, Diversity, and Flexibility
to Enable a Resilient Supply Chain
Supply Chain Disruptions: Top Challenges to Responding EffectivelyTop priorities for retail supply
chains in the next 12 months:
21%
Reduce costs, eliminate
waste, drive efficiency
20%
Continue to modernize/
update IT-related supply
chain infrastructure
20%
Improve supply chain
resilience
20%
Modify / redesign existing
products to improve
supply chain availability
Retailers must reduce
the time and work needed
to get data where it
needs to go and into the
right hands.
Focus on
cost-efficiency
at the expense
of resilience
30%
Supply chain
partner constraints
34%
IT systems
dominated by
legacy/on-premises
applications
33%
Investment
in disparate
process/vendor
applications versus
aligning across
key platforms
21%
24InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Understand the Risks and Make Smart
Investments in the Right Technologies
Understanding the Risks of Technologies
What steps are you taking to mitigate risk in your supply chain?
Improve supply
chain visibility
Diversify supply
globally
Improve supply
chain agility
Collaborate with
supply chain partners
in risk mitigation
Better align
supply chain design
with operations
Adjust/reposition
inventory
33%
29%
25%
24% 24%
36%
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
30% The top area of focus for extending
visibility is in supply chain planning. 37% The top area for improving agility
is in improved supply chain integration.
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Understand the Risks and Make Smart
Investments in the Right Technologies
Understanding the Risks of Technologies
What steps are you taking to mitigate risk in your supply chain?
Improve supply
chain visibility
Diversify supply
globally
Improve supply
chain agility
Collaborate with
supply chain partners
in risk mitigation
Better align
supply chain design
with operations
Adjust/reposition
inventory
33%
29%
25%
24% 24%
36%
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
30% The top area of focus for extending
visibility is in supply chain planning. 37% The top area for improving agility
is in improved supply chain integration.
25InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Understand the Risks and Make Smart
Investments in the Right Technologies
(continued)
Making Smart Investments in the Right Technologies
How important are the following technologies in your organization today?
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Supply chain cloud platforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supply chain SaaS/cloud applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AI/machine learning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Smart mobility/mobile devices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Generative AI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robotics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced/comprehensive analytics (non-AI). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wireless connectivity (e.g., 5G, SD-WAN, NB-IOT, WiFi6). . . . . . . . . . . . . . .
24%
20%
26%
23%
16%
30%
23%
17%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Understand the Risks and Make Smart
Investments in the Right Technologies
(continued)
Making Smart Investments in the Right Technologies
How important are the following technologies in your organization today?
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Supply chain cloud platforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supply chain SaaS/cloud applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AI/machine learning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Smart mobility/mobile devices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Generative AI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robotics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced/comprehensive analytics (non-AI). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wireless connectivity (e.g., 5G, SD-WAN, NB-IOT, WiFi6). . . . . . . . . . . . . . .
24%
20%
26%
23%
16%
30%
23%
17%
26InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Reap the Benefits of a Resilient Supply Chain
GenAI holds significant opportunity to build resilience while removing human decision-making and
is broadly enabled in cloud platforms with integrated applications to support digitalization
and automation across an enterprise for collecting and harnessing voluminous good data that can
be used effectively. In supply chain, we’re already seeing interest in GenAI for areas such as:
Generative design to quickly create diverse product variations rapidly
Sourcing optimization and auto-negotiation to gain deeper insights into supplier capabilities
and streamline sourcing decisions and processes
End-to-end fulfillment synchronization to optimize fulfillment processes across retail
Automation of product classification and specification to speed product introductions,
assortments, and substitutions
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Reap the Benefits of a Resilient Supply Chain
GenAI holds significant opportunity to build resilience while removing human decision-making and
is broadly enabled in cloud platforms with integrated applications to support digitalization
and automation across an enterprise for collecting and harnessing voluminous good data that can
be used effectively. In supply chain, we’re already seeing interest in GenAI for areas such as:
Generative design to quickly create diverse product variations rapidly
Sourcing optimization and auto-negotiation to gain deeper insights into supplier capabilities
and streamline sourcing decisions and processes
End-to-end fulfillment synchronization to optimize fulfillment processes across retail
Automation of product classification and specification to speed product introductions,
assortments, and substitutions
27InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Resilience Only Works if It’s Enabled
Before Disruption Occurs
Retailer Tips for Bringing Resilience to the Supply Chain
⊲Enable visibility and agility to see necessary changes in time
to react to them effectively.
⊲Operationalize sustainability within your supply chain.
⊲Collaborate with external suppliers and/or customers.
⊲Diversify sourcing.
⊲Gain deep insight into customers and consumers.
⊲Build digital capabilities to enable supply chain transitions
to new business models.
⊲Enable robust data analytics and insight intelligence.
Supply chains need to provide
a seamless online and offline
experience for retail or B2B.
This requires a customer-centric
organization that follows the
customer journey rather than a
specific channel so that we can
serve the customer agnostically.”
Global Vice President of Supply Chain
at a midsize office furniture and
supplies retailer
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
Resilience Only Works if It’s Enabled
Before Disruption Occurs
Retailer Tips for Bringing Resilience to the Supply Chain
⊲Enable visibility and agility to see necessary changes in time
to react to them effectively.
⊲Operationalize sustainability within your supply chain.
⊲Collaborate with external suppliers and/or customers.
⊲Diversify sourcing.
⊲Gain deep insight into customers and consumers.
⊲Build digital capabilities to enable supply chain transitions
to new business models.
⊲Enable robust data analytics and insight intelligence.
Supply chains need to provide
a seamless online and offline
experience for retail or B2B.
This requires a customer-centric
organization that follows the
customer journey rather than a
specific channel so that we can
serve the customer agnostically.”
Global Vice President of Supply Chain
at a midsize office furniture and
supplies retailer
28InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
We need to move away from the sole
sourcing of logistics to achieve a
balance of strategic partnerships with
key suppliers … No one has infinite
capacity, and sole sourcing can leave
you high and dry in peak periods.”
Vice President of Procurement at a large
global specialty apparel retailer
Even when there’s data, it’s difficult
to use effectively, with 80% of time
spent making data understandable and
20% of time taking action when it
should be the reverse.”
Global Vice President of Supply Chain at a
midsize office furniture and supplies retailer
Resilience Only Works if It’s Enabled
Before Disruption Occurs
(continued)
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
of retailers cite the lack of visibility and
agility to see necessary changes
in time to react to them effectively as
the most problematic gap …
… if not addressed in the next 12 months.
22%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 3 | BOOSTING SUPPLY CHAIN RESILIENCE WITH AI Chapter 4Chapter 3Chapter 2Chapter 1
We need to move away from the sole
sourcing of logistics to achieve a
balance of strategic partnerships with
key suppliers … No one has infinite
capacity, and sole sourcing can leave
you high and dry in peak periods.”
Vice President of Procurement at a large
global specialty apparel retailer
Even when there’s data, it’s difficult
to use effectively, with 80% of time
spent making data understandable and
20% of time taking action when it
should be the reverse.”
Global Vice President of Supply Chain at a
midsize office furniture and supplies retailer
Resilience Only Works if It’s Enabled
Before Disruption Occurs
(continued)
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
of retailers cite the lack of visibility and
agility to see necessary changes
in time to react to them effectively as
the most problematic gap …
… if not addressed in the next 12 months.
22%
29InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI in Retail: Redefining the Future
4
Championing Sustainable
Innovation
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI in Retail: Redefining the Future
4
Championing Sustainable
Innovation
30InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Consumers, Community, Competition,
and Costs Drive Retailers to Focus on
End-to-End Sustainability
n = 1,010; Source: IDC’s Consumer Sentiment Survey, July 2022. n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
of consumers say that, in general, a retailer’s sustainability record is important
or very important
to their willingness to do business with that company.
46%
More specifically, of consumers say that a product’s environmental sustainability
weighs most heavily on their decisions about where to shop.
16%
of consumers say that product design and messaging highlighting a product’s
sustainability or a company’s sustainability practices
are very important to them
when making decisions about purchases in the moment.
29%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Consumers, Community, Competition,
and Costs Drive Retailers to Focus on
End-to-End Sustainability
n = 1,010; Source: IDC’s Consumer Sentiment Survey, July 2022. n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
of consumers say that, in general, a retailer’s sustainability record is important
or very important
to their willingness to do business with that company.
46%
More specifically, of consumers say that a product’s environmental sustainability
weighs most heavily on their decisions about where to shop.
16%
of consumers say that product design and messaging highlighting a product’s
sustainability or a company’s sustainability practices
are very important to them
when making decisions about purchases in the moment.
29%
31InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
n = 1,010; Source: IDC’s Consumer Sentiment Survey, July 2022. n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Consumers, Community, Competition,
and Costs Drive Retailers to Focus on
End-to-End Sustainability
(continued)
Primary Incentives for Retailers to Focus on Sustainability Across the Supply Chain
External pressures
(customer/consumer
expectations)
Cost
optimization
It’s a condition
to stay competitive
Internal pressures
(our company’s
strategy)
Internal pressures
(community,
employees)
External pressures
(regulatory
requirements)
16%
15%
14%
10%
9%
21%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
n = 1,010; Source: IDC’s Consumer Sentiment Survey, July 2022. n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Consumers, Community, Competition,
and Costs Drive Retailers to Focus on
End-to-End Sustainability
(continued)
Primary Incentives for Retailers to Focus on Sustainability Across the Supply Chain
External pressures
(customer/consumer
expectations)
Cost
optimization
It’s a condition
to stay competitive
Internal pressures
(our company’s
strategy)
Internal pressures
(community,
employees)
External pressures
(regulatory
requirements)
16%
15%
14%
10%
9%
21%
32InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Retailers Set Goals to Optimize Inventory
and Reduce Energy, Packaging, and Water
Consumption for Improved Sustainability
Tier 2 supplier certifications
just fell by the wayside for many
folks. Even if you’re iconic
and well known, most brands /
retailers still don’t have the clout
of Walmart.”
Vice President of Procurement at
a global specialty apparel retailer
From a sustainability perspective, which areas are most important to you?
Warehouse and/or inventory efficiency/optimization. . . . . . . . . . . . . . . .
Energy consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction/elimination of packaging. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Water or other resource consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The energy efficiency requirements of our products. . . . . . . . . . . . . . . .
Product recycling/reverse logistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporating sustainability requirements
into product designs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23%
21%
25%
22%
21%
25%
22%
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Retailers Set Goals to Optimize Inventory
and Reduce Energy, Packaging, and Water
Consumption for Improved Sustainability
Tier 2 supplier certifications
just fell by the wayside for many
folks. Even if you’re iconic
and well known, most brands /
retailers still don’t have the clout
of Walmart.”
Vice President of Procurement at
a global specialty apparel retailer
From a sustainability perspective, which areas are most important to you?
Warehouse and/or inventory efficiency/optimization. . . . . . . . . . . . . . . .
Energy consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction/elimination of packaging. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Water or other resource consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The energy efficiency requirements of our products. . . . . . . . . . . . . . . .
Product recycling/reverse logistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporating sustainability requirements
into product designs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23%
21%
25%
22%
21%
25%
22%
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
33InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Retailers Set Goals to Optimize Inventory
and Reduce Energy, Packaging, and Water
Consumption for Improved Sustainability
(continued)
CHALLENGES FOR RETAILERS:
Packaging poses a variety of problems. It is
difficult to navigate the variety of packaging
rules on a worldwide basis, the capacity
for sustainable packaging is not sufficient to
meet needs, and it’s difficult to create recyclable
packaging while satisfying marketing. How do
you put gold foil on a 100% recyclable bag?”
Recycling is a big struggle. We use RFID.
We know material by item. But how do you
reverse it? Even if you do all the right things from
a sourcing and production perspective, what
do you do on the other side, especially when
you have an item with many components?”
Vice President of Procurement at a global
specialty apparel retailer
Only 22% of retailers can
report Scope 3 requirements for
their supply chains.
Are you able to report Scopes 1, 2, and 3 requirements for your supply chains?
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Scopes 1 and 2 only. . . . . . . .
Scope 1 only. . . . . . . . . . . . . . . . . . . . .
Scopes 1, 2, and 3. . . . . . . . . . . .
None of them. . . . . . . . . . . . . . . . . . .
22%
10%
29%
40%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Retailers Set Goals to Optimize Inventory
and Reduce Energy, Packaging, and Water
Consumption for Improved Sustainability
(continued)
CHALLENGES FOR RETAILERS:
Packaging poses a variety of problems. It is
difficult to navigate the variety of packaging
rules on a worldwide basis, the capacity
for sustainable packaging is not sufficient to
meet needs, and it’s difficult to create recyclable
packaging while satisfying marketing. How do
you put gold foil on a 100% recyclable bag?”
Recycling is a big struggle. We use RFID.
We know material by item. But how do you
reverse it? Even if you do all the right things from
a sourcing and production perspective, what
do you do on the other side, especially when
you have an item with many components?”
Vice President of Procurement at a global
specialty apparel retailer
Only 22% of retailers can
report Scope 3 requirements for
their supply chains.
Are you able to report Scopes 1, 2, and 3 requirements for your supply chains?
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Scopes 1 and 2 only. . . . . . . .
Scope 1 only. . . . . . . . . . . . . . . . . . . . .
Scopes 1, 2, and 3. . . . . . . . . . . .
None of them. . . . . . . . . . . . . . . . . . .
22%
10%
29%
40%
34InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Optimizing routing,
rightsizing packaging, and
optimizing packing
contribute to improved
carbon accounting results.
The waste stream doesn’t
subside after purchase.
Retailers are quickly
returning inventory onto the
sales floor and developing
recycling, reuse, and
repurposing programs.
Sustainability cannot emerge from
siloed supply chain participants.
Even organizations reporting that
they lag behind their peers cite
high rates of collaboration
with suppliers to
operationalize sustainability.
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Sustainable Retail Practices Prioritize
Efficient Operations and Waste Reduction
Retailers are operationalizing sustainability across the end-to-end supply chain.
BENEFITS:
⊲Greater efficiency
⊲Reduced waste
⊲Lower costs
⊲Less raw material extraction
from the earth
⊲Less energy consumption
⊲Labor savings
⊲Freed-up funds for innovation
⊲Healthier communities
⊲A healthier planet
Retailers must allocate
inventory closest to the
consumer from the start to
avoid multiple moves and
long travel distances.
Collaborating
with suppliers
to help them build
sustainable practices
into their operations
46%
Embedding
sustainable
practices into
transportation
and logistics
41%
Embedding
sustainable
practices into
product post-purchase
activities and
reverse logistics
38%
Embedding
sustainable
practices into
inventory and order
management
36%
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Optimizing routing,
rightsizing packaging, and
optimizing packing
contribute to improved
carbon accounting results.
The waste stream doesn’t
subside after purchase.
Retailers are quickly
returning inventory onto the
sales floor and developing
recycling, reuse, and
repurposing programs.
Sustainability cannot emerge from
siloed supply chain participants.
Even organizations reporting that
they lag behind their peers cite
high rates of collaboration
with suppliers to
operationalize sustainability.
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Sustainable Retail Practices Prioritize
Efficient Operations and Waste Reduction
Retailers are operationalizing sustainability across the end-to-end supply chain.
BENEFITS:
⊲Greater efficiency
⊲Reduced waste
⊲Lower costs
⊲Less raw material extraction
from the earth
⊲Less energy consumption
⊲Labor savings
⊲Freed-up funds for innovation
⊲Healthier communities
⊲A healthier planet
Retailers must allocate
inventory closest to the
consumer from the start to
avoid multiple moves and
long travel distances.
Collaborating
with suppliers
to help them build
sustainable practices
into their operations
46%
Embedding
sustainable
practices into
transportation
and logistics
41%
Embedding
sustainable
practices into
product post-purchase
activities and
reverse logistics
38%
Embedding
sustainable
practices into
inventory and order
management
36%
35InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Sustainable Retail Requires a Holistic Mindset
and Bite-Sized Actions
To reduce environmental footprint, the following goals should be set:
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Supply chain transparency
Retailers need insight into the sustainable practices
and outcomes of their Tier 1 /Tier X suppliers.
Only 22% of retailers can report Scope 3 requirements
for their supply chains.
We want to bring the value of sustainability to the customer,
which we do by evaluating, selecting, and sourcing products that
have higher sustainability scores. It’s a mix of different things,
with a focus on reducing gas emissions and offsetting carbon.”
Global Vice President of Supply Chain at
a midsize office furniture and supplies retailer
Sustainable practices in operations
Operationalizing sustainable practices eliminates
waste and creates efficiencies across nodes of the
end-to-end supply chain, including planning, production,
transportation, logistics, fulfillment, delivery, and returns.
Meeting sustainability targets makes supply chains more efficient.
For example, we were managing a number of trucks per day
and discovered that many were going out half empty. By shifting to
half as many full trucks, we automatically saved on cost as well
as carbon footprint. This optimization of the supply chain network
is how we are both improving our carbon footprint and reducing
transportation costs. It creates positive effects all around.”
Global Vice President of Supply Chain at
a midsize office furniture and supplies retailer
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Sustainable Retail Requires a Holistic Mindset
and Bite-Sized Actions
To reduce environmental footprint, the following goals should be set:
n = 377 (retail); Source: IDC’s Supply Chain Survey 2024, April 2024
Supply chain transparency
Retailers need insight into the sustainable practices
and outcomes of their Tier 1 /Tier X suppliers.
Only 22% of retailers can report Scope 3 requirements
for their supply chains.
We want to bring the value of sustainability to the customer,
which we do by evaluating, selecting, and sourcing products that
have higher sustainability scores. It’s a mix of different things,
with a focus on reducing gas emissions and offsetting carbon.”
Global Vice President of Supply Chain at
a midsize office furniture and supplies retailer
Sustainable practices in operations
Operationalizing sustainable practices eliminates
waste and creates efficiencies across nodes of the
end-to-end supply chain, including planning, production,
transportation, logistics, fulfillment, delivery, and returns.
Meeting sustainability targets makes supply chains more efficient.
For example, we were managing a number of trucks per day
and discovered that many were going out half empty. By shifting to
half as many full trucks, we automatically saved on cost as well
as carbon footprint. This optimization of the supply chain network
is how we are both improving our carbon footprint and reducing
transportation costs. It creates positive effects all around.”
Global Vice President of Supply Chain at
a midsize office furniture and supplies retailer
36InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Sustainable Retail Requires a Holistic Mindset
and Bite-Sized Actions
(continued)
You need to build from step to step. Our first year, we did baseline
data collection. Our second year, we added a software solution
for tracking and reporting results both internally and from vendors.
You have to get rigor in place before setting carbon-neutral
objectives. The goal is to reduce your footprint without
jeopardizing growth.”
Vice President of Procurement at a global specialty apparel retailer
Compliance through measuring and benchmarking
Retailers need data to comply with (and surpass)
current regulations and those coming down the pike.
They need to measure, set benchmarks, improve, and
repeat. Over time, the goal is to move toward automated
responses, with AI learning as it goes to adapt to
regulatory changes while keeping compliance functions
moving along.
Collaboration and innovation
Retailers must collaborate with suppliers and other
partners to achieve sustainability across the E2E supply
chain. No man is an island, and neither is a retailer.
To achieve sustainability goals, you need to involve your partners.
It is a super complex area. It is very costly. It is essential for
your reputation.”
Head of Sustainability at a global consumer goods retailer
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
CHAPTER 4 | CHAMPIONING SUSTAINABLE INNOVATION Chapter 4Chapter 3Chapter 2Chapter 1
Sustainable Retail Requires a Holistic Mindset
and Bite-Sized Actions
(continued)
You need to build from step to step. Our first year, we did baseline
data collection. Our second year, we added a software solution
for tracking and reporting results both internally and from vendors.
You have to get rigor in place before setting carbon-neutral
objectives. The goal is to reduce your footprint without
jeopardizing growth.”
Vice President of Procurement at a global specialty apparel retailer
Compliance through measuring and benchmarking
Retailers need data to comply with (and surpass)
current regulations and those coming down the pike.
They need to measure, set benchmarks, improve, and
repeat. Over time, the goal is to move toward automated
responses, with AI learning as it goes to adapt to
regulatory changes while keeping compliance functions
moving along.
Collaboration and innovation
Retailers must collaborate with suppliers and other
partners to achieve sustainability across the E2E supply
chain. No man is an island, and neither is a retailer.
To achieve sustainability goals, you need to involve your partners.
It is a super complex area. It is very costly. It is essential for
your reputation.”
Head of Sustainability at a global consumer goods retailer
37InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI-enabled and data-driven end-to-end supply chains are resilient.
Omnichannel retail requires supply chain resilience — enable visibility and agility to see the necessary
changes in time to react to them effectively.
Sustainable retail practices prioritize efficient operations and waste reduction.
A holistic mindset and bite-sized actions result in sustainable retail, operating effectively across
all aspects of the business.
Key Takeaways
Omnichannel is the norm. Leverage data- and AI-driven insights to improve the customer
experience at every moment of the customer journey.
Marketing and merchandising are core to retail business. They are growing together,
unlocking the benefits of AI — agile, data-driven, comprehensive, and continuous merchandising will
drive revenue and desired customer outcomes.
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
AI-enabled and data-driven end-to-end supply chains are resilient.
Omnichannel retail requires supply chain resilience — enable visibility and agility to see the necessary
changes in time to react to them effectively.
Sustainable retail practices prioritize efficient operations and waste reduction.
A holistic mindset and bite-sized actions result in sustainable retail, operating effectively across
all aspects of the business.
Key Takeaways
Omnichannel is the norm. Leverage data- and AI-driven insights to improve the customer
experience at every moment of the customer journey.
Marketing and merchandising are core to retail business. They are growing together,
unlocking the benefits of AI — agile, data-driven, comprehensive, and continuous merchandising will
drive revenue and desired customer outcomes.
38InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
Know organizational priorities and establish a defined path to meet objectives
with clearly identified milestones.
Diversify sourcing, IT, talent, ideas, processes, and partnerships to operationalize
them across the enterprise and the ecosystem.
Leverage data platforms and integration tools that facilitate innovation and improve resilience.
Strive for integrated, holistic, and seamless collaboration across teams to yield
the best results.
Focus on being a customer-centric organization by effectively orchestrating experience
and data-driven strategies across end-to-end planning and operations.
Essential Guidance
July 2024 | IDC #US52342224 Table of ContentsChapter 4Chapter 3Chapter 2Chapter 1AI in Retail: Rede ning the Future
Know organizational priorities and establish a defined path to meet objectives
with clearly identified milestones.
Diversify sourcing, IT, talent, ideas, processes, and partnerships to operationalize
them across the enterprise and the ecosystem.
Leverage data platforms and integration tools that facilitate innovation and improve resilience.
Strive for integrated, holistic, and seamless collaboration across teams to yield
the best results.
Focus on being a customer-centric organization by effectively orchestrating experience
and data-driven strategies across end-to-end planning and operations.
Essential Guidance
39InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
Appendix: Supplemental Data
The table in this appendix provides an accessible version of the data for the complex figure in this document.
Click “Return to original figure” below this table to get back to the original data figure.
SUPPLEMENTAL DATA FROM PAGE 7
Consumers Will Abandon Retailers That Lag in Providing an Omnichannel Experience
Services retailers are
prioritizing for consumers
Consumers likely or very likely
to select a different retailer
Option to reserve online and pick up in store (ROPIS) 19% 49%
Option to buy online and pick up curbside 25% 45%
Option to buy online and pick up from self-service lockers 27% 45%
Ability to buy online and pick up in store (BOPIS) 27% 41%
Option to buy online and add to order when picking up curbside 29% 46%
Online visibility into available inventory, costs, and location before buying31% 48%
Offer same-day delivery when buying online 32% 46%
Ability to shop online or in store with the same retailer 35% 47%
Flexibility to return purchases made in store or online to either channel43% 55%
n = 800 (retailers); Source: IDC’s Global Retail Operating Models Survey, August 2022, n = 1,010 (consumers); Source: IDC’s Consumer Sentiment Survey, July 2022.
Return to original figure
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
Appendix: Supplemental Data
The table in this appendix provides an accessible version of the data for the complex figure in this document.
Click “Return to original figure” below this table to get back to the original data figure.
SUPPLEMENTAL DATA FROM PAGE 7
Consumers Will Abandon Retailers That Lag in Providing an Omnichannel Experience
Services retailers are
prioritizing for consumers
Consumers likely or very likely
to select a different retailer
Option to reserve online and pick up in store (ROPIS) 19% 49%
Option to buy online and pick up curbside 25% 45%
Option to buy online and pick up from self-service lockers 27% 45%
Ability to buy online and pick up in store (BOPIS) 27% 41%
Option to buy online and add to order when picking up curbside 29% 46%
Online visibility into available inventory, costs, and location before buying31% 48%
Offer same-day delivery when buying online 32% 46%
Ability to shop online or in store with the same retailer 35% 47%
Flexibility to return purchases made in store or online to either channel43% 55%
n = 800 (retailers); Source: IDC’s Global Retail Operating Models Survey, August 2022, n = 1,010 (consumers); Source: IDC’s Consumer Sentiment Survey, July 2022.
Return to original figure
40InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
As Group Vice President, Leslie Hand is responsible for the research direction
and teams supporting IDC Retail Insights and IDC Financial Insights.
Hand works closely with the teams to help guide technology suppliers and
buyers to develop best practices and strategies, aligned with where they
are and where they want to go, leveraging IDC quantitative and qualitative
data sets. Hand’s specific research focus includes a particular emphasis
on the digital transformation of the future “store,” which operates in real time,
is AI enabled, and connects omnichannel customers to the frictionless,
“touch free,” and secure experience they desire.
More about Leslie Hand
Jordan Speer is Research Director for IDC Retail Insights, responsible for covering
the global retail supply chain, with emphasis on product sourcing, fulfillment, and
sustainability. Speer’s core research examines how digital technology opens
opportunities to better connect and optimize the execution of the end-to-end
product life cycle from the design and sourcing stages through order orchestration
and fulfillment to the customer. Her research will cover product development
and sourcing, demand forecasting, order orchestration and last-mile omni-channel
fulfillment, returns and reverse logistics, and track and trace, with particular
emphasis on how software applications and technology such as AI, RFID, IoT, and
robotics can enhance these processes to enable more sustainable products
and enterprises. Speer works with retailers and technology providers to help
all parties understand where industry is headed and which best practices will
align with their strategies to take them there.
More about Jordan Speer
Leslie Hand
Group Vice President,
IDC Retail and Financial Insights, IDC
Jordan Speer
Research Director,
Worldwide Retail Product Sourcing, Fulfillment, and
Sustainability Strategies, IDC
About the IDC Analysts
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
As Group Vice President, Leslie Hand is responsible for the research direction
and teams supporting IDC Retail Insights and IDC Financial Insights.
Hand works closely with the teams to help guide technology suppliers and
buyers to develop best practices and strategies, aligned with where they
are and where they want to go, leveraging IDC quantitative and qualitative
data sets. Hand’s specific research focus includes a particular emphasis
on the digital transformation of the future “store,” which operates in real time,
is AI enabled, and connects omnichannel customers to the frictionless,
“touch free,” and secure experience they desire.
More about Leslie Hand
Jordan Speer is Research Director for IDC Retail Insights, responsible for covering
the global retail supply chain, with emphasis on product sourcing, fulfillment, and
sustainability. Speer’s core research examines how digital technology opens
opportunities to better connect and optimize the execution of the end-to-end
product life cycle from the design and sourcing stages through order orchestration
and fulfillment to the customer. Her research will cover product development
and sourcing, demand forecasting, order orchestration and last-mile omni-channel
fulfillment, returns and reverse logistics, and track and trace, with particular
emphasis on how software applications and technology such as AI, RFID, IoT, and
robotics can enhance these processes to enable more sustainable products
and enterprises. Speer works with retailers and technology providers to help
all parties understand where industry is headed and which best practices will
align with their strategies to take them there.
More about Jordan Speer
Leslie Hand
Group Vice President,
IDC Retail and Financial Insights, IDC
Jordan Speer
Research Director,
Worldwide Retail Product Sourcing, Fulfillment, and
Sustainability Strategies, IDC
About the IDC Analysts
41InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
Ananda Chakravarty is Vice President for IDC Retail Insights, responsible
for the Retail Merchandising and Marketing Analytics Strategies practice.
Chakravarty’s core research covers in-store and digital retail merchandising,
digital tools, artificial intelligence, intelligent store operations, retail marketing,
and retail media. It includes application of data and data analytics for retail,
including pricing, tech, and decision-making. He builds actionable strategic
research focused on retail business merchandising and marketing.
More about Ananda Chakravarty
Ananda Chakravarty
Research Vice President, Retail Merchandising and
Marketing Analytics Strategies, IDC
About the IDC Analysts (continued)
July 2024 | IDC #US52342224 Table of ContentsAI in Retail: Rede ning the Future
Ananda Chakravarty is Vice President for IDC Retail Insights, responsible
for the Retail Merchandising and Marketing Analytics Strategies practice.
Chakravarty’s core research covers in-store and digital retail merchandising,
digital tools, artificial intelligence, intelligent store operations, retail marketing,
and retail media. It includes application of data and data analytics for retail,
including pricing, tech, and decision-making. He builds actionable strategic
research focused on retail business merchandising and marketing.
More about Ananda Chakravarty
Ananda Chakravarty
Research Vice President, Retail Merchandising and
Marketing Analytics Strategies, IDC
About the IDC Analysts (continued)
42InfoBrief, sponsored by SAP
July 2024 | IDC #US52342224
AI in Retail: Redeflning the Future Table of Contents
Message from the Sponsor
Discover how SAP’s retail solutions can unlock the power
of AI for your business.
Gain a competitive edge by making efficient omnichannel fulfillment decisions
with AI-driven insights, optimizing assortments to reduce costs and maximize
profits, delivering personalized recommendations to drive conversion
and customer lifetime value, and building resilient and sustainable supply
chains with ML-powered forecasts. With SAP, you can empower your entire
organization to consistently make the right decisions and scale seamlessly
toward the future.
Learn how SAP’s retail solutions unlock the power of AI.
July 2024 | IDC #US52342224
AI in Retail: Redeflning the Future Table of Contents
Message from the Sponsor
Discover how SAP’s retail solutions can unlock the power
of AI for your business.
Gain a competitive edge by making efficient omnichannel fulfillment decisions
with AI-driven insights, optimizing assortments to reduce costs and maximize
profits, delivering personalized recommendations to drive conversion
and customer lifetime value, and building resilient and sustainable supply
chains with ML-powered forecasts. With SAP, you can empower your entire
organization to consistently make the right decisions and scale seamlessly
toward the future.
Learn how SAP’s retail solutions unlock the power of AI.
This publication was produced by IDC Custom Solutions. The opinion, analysis, and research results
presented herein are drawn from more detailed research and analysis independently conducted
and published by IDC, unless specific vendor sponsorship is noted. IDC Custom Solutions makes IDC
content available in a wide range of formats for distribution by various companies. This IDC material
is licensed for external use and in no way does the use or publication of IDC research indicate IDC’s
endorsement of the sponsor’s or licensee’s products or strategies.IDC Research, Inc.
140 Kendrick Street, Building B, Needham, MA 02494, USA
T +1 508 872 8200
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services,
and events for the information technology, telecommunications, and consumer technology markets.
With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology and
industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals,
business executives, and the investment community to make fact-based technology decisions and to achieve
their key business objectives.
©2024 IDC. Reproduction is forbidden unless authorized. All rights reserved. CCPA
idc.com @idc @idc
presented herein are drawn from more detailed research and analysis independently conducted
and published by IDC, unless specific vendor sponsorship is noted. IDC Custom Solutions makes IDC
content available in a wide range of formats for distribution by various companies. This IDC material
is licensed for external use and in no way does the use or publication of IDC research indicate IDC’s
endorsement of the sponsor’s or licensee’s products or strategies.IDC Research, Inc.
140 Kendrick Street, Building B, Needham, MA 02494, USA
T +1 508 872 8200
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services,
and events for the information technology, telecommunications, and consumer technology markets.
With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology and
industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals,
business executives, and the investment community to make fact-based technology decisions and to achieve
their key business objectives.
©2024 IDC. Reproduction is forbidden unless authorized. All rights reserved. CCPA
idc.com @idc @idc
Tags
Categories
TechnologyDownload
Download Slideshow Get the original presentation fileQuick Actions
Statistics
- Views 66
- Slides 43
- Age 278 days
Related Slideshows
11
8-top-ai-courses-for-customer-support-representatives-in-2025.pptx
JeroenErne2
48 views
10
7-essential-ai-courses-for-call-center-supervisors-in-2025.pptx
JeroenErne2
47 views
13
25-essential-ai-courses-for-user-support-specialists-in-2025.pptx
JeroenErne2
37 views
11
8-essential-ai-courses-for-insurance-customer-service-representatives-in-2025.pptx
JeroenErne2
34 views
21
Know for Certain
DaveSinNM
22 views
17
PPT OPD LES 3ertt4t4tqqqe23e3e3rq2qq232.pptx
novasedanayoga46
26 views