AI-powered innovation set to boost Africa's retail sector

Blessed Hwaire, Industry Advisor: Consumer Products, Life Sciences & Retail at SAP Africa

The acceleration of AI adoption in retail is driven by the promise of greater efficiency, enhanced customer experiences, and improved decision-making.

A study of retail leaders conducted by Nvidia revealed that AI is already a proven game-changers for the retail sector. Sixty-nine percent reported an increase in annual revenue attributed to AI adoption, while 72% said using AI has led to lower operating costs.

Understanding retail AI use cases

While Generative AI solutions such as ChatGPT have gained immense prominence since its launch in 2022, industries are only beginning to unlock the full scope of broader AI use cases. The retail sector is no exception.

Leading retailers across the continent are collaborating with experienced AI partners to explore, define and unlock AI use cases in a growing range of business applications, infusing AI throughout the retail value chain and driving innovation and efficiency at every step.

Some current use cases of AI in the retail sector include:

• Enhanced customer engagement through dynamic personalised product recommendations, predictive contextualised search capabilities, and automated natural language-based customer conversations.
  
• Improved financial processes through the automatic extraction and validation of invoice data, automatic matching of invoices and payment notes, and automated error explanations and guided resolutions in financial closing.
  
• More resilient supply chains through AI-enabled forecasting and replenishment, optimal product warehousing, and document processing for goods receipts.
  
• More efficient store operations and e-commerce through autonomous stock-taking, frictionless checkout experiences, and virtual try-ons that minimise product returns.
  
• Greater sustainability across retail operations through optimised logistics and resource management, waste minimisation, and a reduced carbon footprint.

Roadmap to retail AI adoption

How can retailers get started on their journey to developing AI-powered capabilities?

Two approaches can be followed to help retailers operationalise AI in their businesses:

Firstly, a 'blue sky' approach involves retailers exploring relevant use cases and prioritising the ones that are most closely aligned to their broader business objectives. Here, retailers should take care to ensure the AI use cases make sense in the specific context of their organisation.

Secondly, retailers taking a 'targeted' approach typically identify one or more specific use cases to address relevant and urgent business challenges or opportunities. AI-powered capabilities are then built around the specific and urgent challenges and opportunities to accelerate time to value.

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Regardless of the chosen approach, retailers must keep sight of a few key elements needed for a successful AI deployment, including:

• Clearly defining the business objectives and requirements of the AI initiative.
  
• Assembling a cross-functional team of IT and business professionals.
  
• Ensuring ready access to relevant, accurate business data.
  
• Establishing clearly defined KPIs to measure the adoption rate and outcomes of the AI initiative.
  
• Collaborating with a trusted and experienced solution partner that can provide technical and business expertise, share best-practices, and help realise immediate and long-term business benefits through ongoing value engineering.

Africa's rapidly evolving retail sector is poised for an AI-powered future, defined by greater differentiation and enhanced capabilities for catering to customer needs. By leveraging the expertise of experienced AI partners, retailers across the continent stand to achieve greater efficiency and profitability while driving advances in innovation, customer experience and growth.