Key Takeaways from NRF 2024: Addressing Retailers’ Questions and Challenges Around AI Adoption

Martin Gilliard
4 min readJan 17, 2024

This past weekend I had the opportunity to speak at NRF ’24 in a session called “AI Adoption in Retail: Overcoming Challenges and Embracing Opportunities” as well as moderate the Supply Chain 360 Summit session “AI’s Role in Inventory Visibility and Optimization”. What I quickly realized through extensive Q&A sessions, was that retailers are continuing to face some challenges when trying to embrace artificial intelligence. Below I address some of the key questions I received during the NRF sessions.

Where Should Data Science Sit In An Organization?

Simply put, it is a function that should sit horizontally across your organization. The optimal placement of data science within an organization is a critical consideration for maximizing its impact and effectiveness. Data science teams play a pivotal role in extracting valuable insights from data to inform decision-making processes. Ideally, data science should be integrated into the core functions of the organization and positioned strategically to collaborate with key business units.

Placing data science within a centralized team ensures cross-functional collaboration and the ability to address diverse challenges. This facilitates seamless communication between data scientists and domain experts, fostering a more nuanced understanding of business goals and enabling the tailoring of data solutions to specific needs. Additionally, a centralized approach allows for the development of standardized methodologies and the sharing of best practices across the organization. All that said, regardless of where data science sits in an organization, the commitment from peer executives is what’s important when making data science and artificial intelligence part of how they perform their jobs.

How Do Retail Executives Learn to Trust AI?

When retail executives are brought in at the early stages of developing AI models for the organization, they tend to trust that AI will do what it claims it can. Additionally, they learn to trust AI through a combination of education, experience, and tangible results. Executives often undergo training programs that delve into the intricacies of AI technologies, demystifying complex algorithms and highlighting their potential benefits for retail operations. Gaining trust involves understanding the capabilities and limitations of AI systems. Hands-on experience is crucial, as executives interact with AI solutions in real-world scenarios, witnessing their impact on decision-making, customer engagement, and operational efficiency.

Trust is further built when AI consistently delivers accurate predictions, enhances personalization, and contributes to data-driven insights that align with business objectives. Transparent communication about AI model processes and continuous monitoring for ethical considerations also play a key role in establishing trust among retail executives. As AI consistently proves its value in driving business outcomes, executives become more confident in embracing and relying on AI technologies for strategic decision-making in the dynamic retail landscape.

Why Must AI Be Customized To Each Specific Retailer Versus Using An Out-Of-The-Box Solution?

Customizing an AI model for each specific retailer is crucial for optimizing its performance and relevance. Retailers vary significantly in terms of their product offerings, target demographics, market positioning, and operational processes. A prepackaged AI solution may offer general functionalities but lacks the adaptability required to address the unique challenges and opportunities that each retailer faces. By tailoring AI systems to the specific needs of a retailer, it becomes possible to enhance customer experiences, streamline supply chain management, and personalize in-store experiences. Customization enables the integration of retailer-specific data, ensuring that the AI model is trained on relevant information, ultimately leading to more accurate predictions and insights. In essence, the customization of AI models aligns the technology with the retailer’s distinct characteristics, fostering innovation and efficiency in the dynamic landscape of retail.

Will AI Cause the Loss of Many Jobs?

Retail executives are increasingly navigating the integration of artificial intelligence (AI) into the retail sector with a dual focus on innovation and job preservation. To ensure that AI adoption doesn’t lead to substantial job losses, these executives prioritize strategic planning and upskilling initiatives. They invest in technologies that enhance efficiency without replacing human input, such as AI-powered assortment planning or inventory management systems. Moreover, they implement comprehensive training programs to empower existing employees with the skills necessary to collaborate effectively with AI systems.

By fostering a culture of continuous learning and leveraging AI to augment human capabilities, retail executives can strike a balance between technological advancement and job security within the industry. This approach not only safeguards current employment but also positions the workforce to thrive in an increasingly AI-driven retail landscape. However, for AI to truly revolutionize the retail sector, a cultural metamorphosis within retail organizations is necessary. A culture of innovation becomes a key driver for AI adoption, encouraging employees to explore new technologies, experiment with AI applications, propose creative solutions, and actively contribute to AI-driven improvements.

Retailers continue to face a multitude of challenges…The persistence of e-commerce giants, elevated operating costs, and shifting consumer preferences have fostered a competitive and unpredictable landscape. Traditional brick-and-mortar stores have grappled with adapting to the digital era, resulting in diminishing foot traffic and sales. Furthermore, supply chain disruptions, escalating operational expenses, and labor shortages have placed additional strain on retailers’ capacity to sustain profitability. To not only endure but flourish, retailers must consistently innovate, invest in technology, and deliver exceptional in-store experiences to cater to the evolving demands of today’s consumers. The growing consensus is that artificial intelligence (AI) can serve as a potent ally in tackling the challenges faced by retailers.

ABOUT ARTELI

Arteli is the first advanced artificial intelligence and machine learning platform to reinvent retail by transforming analytics, blending the physical with the digital, for brick-and-mortar showrooms. Created to function as the central hub for retail executives, Arteli connects executives with actionable insights, propelling their business toward transformation by improving their bottom line, and driving operational efficiency. Arteli aims to reinvent in-store retail by revitalizing in-store shopping for people’s largest purchases. It’s not merely data; it’s comprehension, informed decision-making, and, ultimately, the catalyst for achieving revolutionary outcomes at retail.

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