There’s a lot of economic uncertainty right now and that typically means one thing is guaranteed to happen in retail. Market leaders and those who aspire to be will capitalize on volatile market conditions to make bold moves that position them for long term success. Meanwhile, risk-averse retailers or those with shaky balance sheets will become more cautious and defer investments.
This scenario typically occurs during the ups and downs of economic cycles, but one thing different about the current situation is that it promises to widen the digital divide. We see this happening in key areas, including category planning, where the industry is in an upgrade cycle to AI-powered solutions that give retailers powerful predictive modeling capabilities to keep pace with dynamic shopper behavior.
As retailers evaluate transformative technologies, the stakes are high and there can be a lot of noise in the market. To cut through the clutter, retailers should ask the following questions to assess competency, strategic alignment and vision around the role of AI.
- What problem(s) are you helping me solve and how will doing so improve service to the shopper, enhance the store experience and impact sales and profits? There are many aspects to category planning and retailers need to understand details of the solution provider’s value proposition and how it is substantiated.
- Is the AI platform open and flexible to accommodate multiple data sources without costly integrations? This is key because retailers operate disparate systems, so compatibility is important to extract maximum value at minimum cost along with the ability to integrate potential new sources of shopper insights.
- What is the R&D philosophy and track record of innovation? AI is a fast-moving space filled with innovation so retailers must choose solution providers that are investing to develop capabilities that will provide competitive advantage for years to come.
- Is the technology easy to use? AI is complex, but the user experience shouldn’t be. If systems are overly complex, training will be challenging, and adoption and usage can suffer, resulting in suboptimal performance.
- How will your AI solutions help my company mitigate risk? Category planning is complex with numerous variables that factor into decisions. While the emphasis is generally on maximizing upside potential, identifying where things can go wrong and managing risk is important too.
- Can you provide a value assessment with proof points and references? “Trust but verify” is a useful philosophy when making any decision, but it is especially important when making decisions about AI solutions. The future performance of the business will be driven by the solution chosen, so retailers need reliable assurances that promised performance and business impact can be achieved.
- Can the solution provider function as a trusted advisor? Retailers need partners whose category planning experts understand the dynamics of the industry combined with the technical expertise to understand how AI is fueling its transformation.
- Why is the cloud-based, software-as-a-service (SaaS) approach superior? Cloud native providers of AI solutions should be able to articulate the wide range of benefits versus legacy on-premises approaches.
- How does your AI-based category planning solution operate, and will it make my company more agile, cost-effective, and secure? AI is not created equal, but trusted technology advisors can provide detailed insights into how AI solutions function and the ways in which they are underpinned by the latest data science and advanced algorithms.
- What are the key differentiators that make your company special? While not specifically technical, culture matters at every successful company. It is important to understand a company’s origins, the caliber of senior executives, the industry expertise of the front-line teams and its corporate reputation.
- What opportunity do I have as a retailer to influence your product development roadmap? Business requirements change and it is important that solution providers have a mechanism to receive retailer input and are transparent about planned enhancements.
- What is your strategic vision of how AI will transform retail in the next five and 10 years? Retailers needs to understand whether they are working with an enthusiastic solution provider committed to the advancement of AI and the transformation of grocery.
These are great questions any solution provider should be able to answer, but the most important question is one that retailers must ask themselves.
Is My Organization Ready?
AI-powered category planning solutions help retailers achieve superior results, but the use of advanced technology means new ways of working, possible organizational changes, and trusting recommendations made by technology. Most importantly, implementing AI-powered category planning requires buy-in and ongoing commitment from senior leadership.
For these reasons, every retailer must ask, “Is my company ready for change?” This important question precedes all others because a willingness to embrace the future is essential to realize the potential of advanced category planning solutions. In answering this over-arching question, you can also look to your solution provider to share their best practices and lessons learned in change management gleaned from their experiences supporting multiple grocers with differing cultures and environments.
Have more questions about AI-powered category planning? Connect with a solution consultant.
(For a look at how omnichannel shoppers are affecting category planning and retailer loyalty, don’t miss: Fact vs. Fiction: What’s Really Going on with Grocery E-Commerce.)
