Why Retailers Will Be Ignored By AI If Their Data Is Wrong

0:00Natalie Berg: Click and collect, ship from store, same day delivery. Are those still relevant for retailers today? They're irrelevant, but you actually have to make it work correctly. If you're not ready for that, then you better don't do it because then you will disappoint. Only about 22 % of retailers have reached an advanced maturity level of accurate stock information across all their channels. If you go down to the store level accuracy, it's only 11.5 % have reached advanced maturity level. If the foundation is not there and you're disappointing the consumer, you're not going to have the consumer coming back.

0:33You need to earn the trust and the trust will be earned through consistency and reliability of your operations.

0:48Natalie Berg: Welcome to Retail Disrupted, a podcast that explores all the trends shaping the future of retail. I'm your host, Natalie Berg, and today I'm coming to you from Milan, where I'm going to be speaking to Peter Vandenbroek, head of EMEA supply chain strategy at Manhattan Associates. Before we dive in, though, if you're enjoying these conversations, please do hit that subscribe button. Every week we speak to retail's leaders and disruptors, and subscribing ensures that you never miss an episode. Okay, let's dive in to today's episode with Peter.

1:22Natalie Berg: Peter, it's great to see you. Welcome back to the podcast. Thank you, Natalie. Nice to meet you again. Yes, it's great to have you back. I think the last time you were on the show was 2024 when we sat down in Barcelona. A lot's changed. Not a lot of time has passed, but a lot has changed. Peter, give us your kind of bird's eye view on the sector. What are some of the big shifts that you're observing? You know, AI is top of mind for everyone. It's really accelerating at an exponential speed. and the really good thing is and i'm a positivist as a as a person is that the value promise for retail is really strong and we can see that really with our customers that are implementing piloting or thinking of implementing it and they get real results out of this new technology now that's that's one element in the last two years also geopolitical events have been really you know challenging us everywhere and for retail specifically it's it's not an easy time Cost of doing business is rising, which is giving us inflation.

2:21And there is uncertainty on the supply of products. So retailers are really in the middle of that squeeze, you know, cost squeeze, uncertainty on the supply squeeze and the demand squeeze. So it's a really exciting time, to be honest, but also interesting.

2:35Natalie Berg: Yeah, yeah. Certainly not a time to be standing still, right? So there's so much happening. So much happening. And as a retailer, you have to actually constantly be able to absorb this change and be ahead of the curve somehow to the extent you can be ahead of the curve. Yeah. Yeah. Which is exceptionally hard. One of the biggest changes that we're seeing is how consumers are searching and discovering products. I think that part of the customer journey has been disrupted. It's an exciting time, but it's also a challenging time for retailers because the way that consumers are being influenced is evolving almost by the day.

3:10Natalie Berg: So I'd love to get your thoughts specifically on AI, because I think there is AI and there's social media that are really the two disruptors in this regard. But if we look specifically at AI, tell us, how are you seeing it reshape the customer journey? And what does that mean for retailers? We did a survey with a C-level survey with the World Retail Congress a few months ago. And in that survey, retailers are saying that by 2030, 98 % of the discovery will happen through AI tools. which is which is massive 98 yeah more than 90 98 and i don't know if this is the exact number eventually in 2030 but a pwc holiday outlook 2026 is saying that right now 29 of consumers you know they expect to use ai tools for for their discovery that doesn't mean that the actual purchase transaction will happen in an ai kind of cloud it probably will end up in a familiar website or an app but the shopper's journey started somewhere else yeah the consequence of that is is pretty vast because the first contact between your brand and your consumer is going to be ai enabled what does it really mean now from a from a delivery perspective so 29 percent more than 90 % by 2030 is that product pages, they are not only written now or used by humans alone.

4:45It's the algorithms, the AI algorithms, they will have to be able to read your data. They will compare prices. They will need to have access to availability of product. They need to actually have ready answers for questions that shoppers ask through AI. And the problem really sits really deep because if you as a retailer are not able to serve up the right information to those AI algorithms, the delivery date that is going to present it, it cannot be just guessed. It needs to be as credible and as accurate as possible. If you leave it as guesswork to the AI machinery, it's not going to work. if you are not able to bring up accurate information on availability then retailers are going to face something that they have never faced before they will not even get to the sale

5:49Natalie Berg: they will be completely ignored because the machine the ai is not actually able to bring that experience and the accuracy that you you you already get used to as a consumer it's interesting isn't it? Because that discoverability, as in retailers or brands being discoverable via an LLM, making sure that they have a presence, because you can't be invisible if that's how consumers are searching for products and discovering new products. But then the data has to be right, I think is what you're saying. And that's been an issue in retail for such a long time, hasn't it? Getting that store level accuracy right for lots of different reasons.

6:25Natalie Berg: But are you saying, Peter, that it's even more important in this AI era? Absolutely. It will be a disaster without having the foundations correct but what do we really mean by data data is something dynamic it's not you know the description of a of a product on the web page it's also data about you know availability and and and when you can make something available and where you can make it available and this is where we also see you know we we work with a partner on unified commerce maturity and it's all about stock information right but not stock static stock which is dynamic across your network in your stores, in your distribution centers, maybe with partners, marketplaces, all of that is a dynamic thing.

7:06And the consumer is everywhere. And now even more everywhere because of AI, right? So and now you need to be able to manage that and you need to be able to serve up accurate information. And we see that there is still a lot of maturity to be gained. Only about 22 % of retailers have reached an advanced maturity level of accurate stock information across all their channels. And if you go down to the store level accuracy, it's only 11.5 % have reached advanced maturity level. And this is very interesting. That's shocking. That's shocking. But if you, with that kind of shaky data, and then you expose it to the world, it's not going to look good.

7:50Natalie Berg: Yeah. And we know that as consumers, if we have a bad experience, it has a direct impact, an immediate impact on the brand. So I guess there's a huge risk for retailers here if there are cracks and the foundations aren't there. Absolutely, but there is even more. There's more damage than the brand damage. You have promised a product to be picked up at the store, at a given store. Now, apparently the product is not available. The store associates, and we are maybe in peak season, they need to go and look for that product. It's not in the store and they lose time. Customer needs to be told it's not available.

8:25you can't pass by to pick it up, we have to do something else. So you're not delivering on your promises, you're messing around with your store associates, and you're disappointing also, and also disrupting the store operations by asking them to do something that they actually can't execute.

8:44Natalie Berg: I'd love to like dive a little bit deeper into stores. This is, you know, a critical trading period for retailers, the next sort of month and a half. So I guess one of the things that's great about stores is the proximity to the customer. Does that still matter? Because you talked about click and collect and ship from store, same day delivery. Are those still relevant for retailers today? Very relevant, but you actually have to make it work correctly. And again, if you're not ready for that, so it's saying that's for AI. If you're not ready for this next step, then you better don't do it um because then you will disappoint so you better do something what you're good at look at fashion retail is relatively low so so if you are not able to bring that to a to the right level then you better don't don't do that and then your proximity advantage is is gone but it's obviously a big opportunity and and and that opportunity i would recommend every retailer to go after that but do some again some investment on the foundation so that you can actually do it in a good way.

9:47Natalie Berg: Yeah, yeah, that's really good advice, because I'm sure the temptation for retailers is to just keep moving. And, you know, not that we're talking, focusing on AI, but with AI, a lot of the change is being driven by the consumer. And then therefore, there's this kind of knee jerk reaction by retailers to keep up, which is kind of admirable, I think, you know, you have to keep evolving. That's what we keep saying about the retail sector. But your point is that the foundations have to be right. The foundations have to be right and need to earn the trust and the trust will be earned through consistency and reliability of your operations how how boring it may sound but these are one of the fundamental pillars of retailing is getting the product at the right time in the right location in the right quantity yeah and the difference with historical way of doing retailing is that consumers are everywhere and you need to be able to access your inventory that is everywhere in your network to meet the expectation of that retailer?

10:47Natalie Berg: When you touched on store associates earlier, so I'd love to just dive into that a little bit more because we know that store associates are multitaskers. They wear a lot of hats because retail is changing so much and the role of the store is evolving so much. So during peak, that becomes all the more important because they're expected to be the salesperson, the fulfillment clerk, the customer service agent. What can retailers do to kind of ease that burden and also continue to motivate their staff? I think technology could help there. You know, making it easy for the staff, easy to execute their job, easy to find a product.

11:19There are technologies like RFID or Bluetooth-based inventory sensing capabilities, giving recommendations to the staff how to move around in the store. And again, you know, having your store digitized as much as possible. Also having all the customer information at their fingertips. Customers are walking to the store, they expect the same service the same knowledge you have about them when they're visiting you digitally they would like to be served in the same way with the same knowledge about you as a consumer when they visit the store they want to be able to return something in the store even if they have bought it online in another store or via an other channel that information is available at the fingertips of the of the store associate so that they can do their job without any friction asking them to do all of this omni-channel magic without the tools to make it happen is absolutely not fair and and and and i would not recommend that yeah yeah it's a really good

12:18Natalie Berg: point peter any final words of advice for the retailers that are tuning in today be very strong on on your foundations and make sure that when you make a promise you can keep your promise this requires foundational capability reliable performance consistent performance and first impressions may win customers but last impressions bring customers back and that's what's really important is having the customer coming back fantastic that's a great note to end on Peter thank you so much for your time it's been great to have you back on the show you're more than welcome thank you Natalie Thank you for listening to Retail Disrupted.

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