Manual processes, low productivity, and human errors are becoming things of the past for many businesses – thanks to the rise of AI and automation. These technologies are redefining how many retailers operate, including Ace Hardware, H&M, UNTUCKit, and many more.
Read on to explore how retailers use AI and automation to increase efficiency, keep costs under control, simplify labor law compliance, and optimize pricing to stay competitive.
Inventory management
For many retailers, managing inventory is complex and time-consuming. Without advanced tools, teams are spending too much precious time entering data manually. And despite a lot of effort, businesses still encounter inaccuracies and errors – all of which can be costly.
That’s why many retailers have embraced AI and automation tools to manage their inventory. On top of automating repetitive tasks, another key advantage AI-powered tools offer is their ability to analyze large volumes of data. They can process and structure data from different inventory aspects like sales history, customer trends, weather conditions, and supplier information.
These analyses allow retail managers to understand historical data, identify trends, and align product fulfillment to customer demand. They can quickly adapt to supply chain fluctuations and accurately forecast inventory to prevent overstocking or understocking.
With these benefits, retailers like H&M can save on costs by avoiding bad product cycles and preventing future markdowns. They can also plan and localize merchandise using accurate demand forecasting and make business adjustments in real-time. In addition, they’re not exposed to paying more in storage costs or waste than they need to.
Labor demand forecasting
Labor is one of the most significant expenses for retailers. And with wages increasing in many states this year, retailers can’t afford to be overstaffed at the wrong times and overspending on labor when they don’t need to.
To stay cost-efficient — and deliver great customer service — it’s never been more essential to plan your staffing perfectly in line with demand. However, to do that correctly, you need to take vast amounts of data into account, from year-over-year sales and recent sales trends to foot traffic and other key inputs. Then, once you have a forecast, you need to accurately calculate how many staff you need to meet those changing peaks and valleys in demand. Needless to say, it’s a task many retailers are automating for both ease and accuracy.
AI-powered scheduling solutions help retail managers plan ideal staff coverage at any given time and stay within their labor budgets.
These AI tools can easily forecast labor demand by demographic, sales history data, weather, and foot traffic patterns. They also offer reports with real-time sales trend insights, which managers can use to ensure they have enough staff to support busy days and avoid overspending on labor costs during slower days.
For Lance Stillwaugh, owner of two Ace Hardware stores in Colorado, investing in one of these digital platforms has been pivotal for his businesses. He can now track his payroll costs as a percentage of sales with pinpoint accuracy and ensure he keeps labor costs within budget.
Juice Press is another business benefiting from the power of a digital solution. By observing labor and sales trends, they can project where sales will be and allocate labor to perfectly match demand. This has helped them increase store revenue and save over $200,000 on front-of-house labor annually.
Employee scheduling
In addition to helping retailers keep labor costs low and profit margins healthy, AI-powered scheduling solutions can also reduce scheduling admin and save managers valuable hours.
AI-powered scheduling tools can, in a matter of seconds or minutes, build out a work schedule for your business according to employee availability, training, wage costs, your labor budget, and other variables like an equal spread of hours.
With these tools, you can also put smart guardrails in place to ensure any schedule changes meet certain rules, automate complex pay calculations, and streamline payroll operations.
Investing in digital scheduling software can even increase employee retention. Employees have the autonomy to swap shifts or request time off directly from any device. They can get real-time business communication, so they never miss a beat on updates. They can also receive schedule updates in real-time so there are no mix-ups or attendance errors.
For retailer UNTUCKit, investing in a digital platform like this has helped their team reduce scheduling workloads by 50% across 45 stores. On top of regaining time back to focus on customers and sales, they’ve been able to foster higher team engagement.
Compliance management
For the retail industry, there are many strict labor laws to keep track of at the federal, state, and city levels, from overtime pay and work hour limits to meal and rest breaks.
This can become extremely complex for retailers with multiple locations across different states and cities. Retailers in California, for example, can require premium pay for missed breaks, split shifts, and 7th consecutive workdays. Got a location in New York, Los Angeles, or Chicago? You may be affected by fair workweek laws, which require advance notice of schedules and premium pay for late changes.
Without compliance management software, many retail managers struggle to streamline compliance management. They’re overwhelmed by tasks like manually tracking breaks, monitoring if breaks occurred, or applying overtime and premium pay when necessary. And if they make any errors, they’re putting their business at risk.
Smart, AI-powered tools can help simplify compliance management and reduce the chances of getting fined. They can track breaks, streamline complex pay calculations, provide digital records, record attestations, and offer visual warnings when schedule changes will incur overtime or predictability pay.
For retailers like Proper Cloth, investing in smart compliance management software has helped their managers gain peace of mind and regain focus on the business and its continued growth.
Pricing Management
Many retailers are turning to AI for pricing optimization in order to maximize profits and stay competitive. AI-driven tools can analyze different types of data like market insights, demand fluctuations, and seasonal or competitor pricing. Using these insights, retailers can set or adjust their prices in real-time.
AI-driven pricing optimization can also impact customer loyalty. It can help you analyze customer behaviors and preferences across different platforms. These insights can influence how retailers create tailored discounts or promotions for their customers.
For retailers who have online shops and in-person stores, AI pricing can also help ensure pricing consistency across both options. This assurance can protect brand reputation and prevent customers from getting confused, especially if they use both methods to purchase from the retail business.
Unlock the power of AI and automation
We’ve seen the retail industry go from brick-and-mortar storefronts to online shops to an omnichannel sales approach. We’ve also seen it evolve from factors like inflation, labor shortages, and supply chain issues.
It’s no wonder so many retailers have unlocked the power of AI and automation in order to adapt, stay profitable, and fuel growth. And as these technologies continue to advance, they’re proving to be a critical backbone for retailers to remain resilient and competitive through any twists and turns.
Curious how automation and digital tools can help you with employee scheduling and demand planning? Download our free ebook to learn 5 ways these smart platforms can be a game-changer for your business.
