Africa’s retail landscape, characterised by diverse consumer needs, a burgeoning youth population, growing technology adoption, and a rapidly changing economic environment, is ripe for innovation. Retailers across the continent are seeking innovative strategies to stay ahead, increasingly relying on Artificial Intelligence (AI) as a crucial technological asset to gain competitive advantages. The acceleration of AI adoption in retail is fuelled 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 game-changer for the retail sector. Sixty-nine percent reported an increase in annual revenue due to AI adoption, while 72% noted that using AI has led to lower operating costs. While generative AI solutions like ChatGPT have gained immense prominence since their launch in 2022, industries are just beginning to unlock the full potential of broader AI use cases. The retail sector is no exception.
Leading retailers across Africa are collaborating with experienced AI partners to explore, define, and unlock AI use cases in a growing range of business applications. This infusion of AI throughout the retail value chain drives innovation and efficiency at every step. Current AI applications in the retail sector include enhanced customer engagement through dynamic personalised product recommendations, predictive contextualised search capabilities, and automated natural language-based customer conversations. Financial processes are improved through the automatic extraction and validation of invoice data, matching invoices and payment notes, and automated error explanations and guided resolutions in financial closing.
Supply chains are becoming more resilient with AI-enabled forecasting and replenishment, optimal product warehousing, and document processing for goods receipts. Store operations and e-commerce are becoming more efficient through autonomous stock-taking, frictionless checkout experiences, and virtual try-ons that minimise product returns. Additionally, sustainability across retail operations is being achieved through optimised logistics and resource management, waste minimisation, and a reduced carbon footprint.
Retailers embarking on their journey to develop AI-powered capabilities can follow two approaches. Firstly, the ‘blue sky’ approach involves exploring relevant use cases and prioritising those aligned with broader business objectives. Retailers should ensure these AI use cases make sense in the specific context of their organisation. Secondly, a ‘targeted’ approach involves identifying specific use cases to address relevant and urgent business challenges or opportunities, building AI-powered capabilities around these challenges to accelerate time to value.
Regardless of the approach, retailers must focus on key elements for a successful AI deployment. These include clearly defining business objectives and requirements, assembling a cross-functional team of IT and business professionals, ensuring access to relevant, accurate business data, establishing KPIs to measure adoption rates and outcomes, and collaborating with a trusted, experienced solution partner for technical and business expertise.
Africa’s rapidly evolving retail sector is poised for an AI-powered future, characterised 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.
itim Group plc (LON:ITIM) is a SaaS-based technology company that enables store-based retailers to optimise their businesses to improve financial performance and effectively compete with online competitors. Itim adds retail value by helping multi-channel retailers optimise their business and their stores to improve financial performance and compete more effectively with the “Amazons”.
