As the COVID-19 crisis quickly escalated between January and March of 2020, consumer activities also quickly shifted. Many went from daily trips to grocery stores to once per week stock-ups or even ordering all food and pantry items online for curbside pickup. Likewise, the way many businesses - from grocery stores to financial offices - changed the way they worked. One of those quick changes was the fast adoption of Artificial Intelligence for customer experience strategies, supply chain optimizations, and forecasting for pandemic impacts.
"[AI] has given a good boost to merchants and brands, especially when it comes to building sustainable businesses for the future. In particular it has helped them tackle three primary objectives: reducing the cost and adoption of digital; improving the shopping experience for consumers; and growing business," said Praneet Aneja, Client Partner, Fractal Analytics.
Aneja notes that AI has helped many brands reduce the costs of adopting a digital-first strategy and, from the customer side, has improved the shopping experience as people shifted their buying habits to digital methods.
"For example, due to the suddenness of lockdowns and social distancing guidance during the COVID-19 pandemic, pilots and large-scale implementations that would have normally taken retailers years to rollout have instead been put in place in weeks or months. Additionally, on the backend, AI has enabled retailers to drive smarter R&D, build better forecasts, optimize production maintenance and more - all of which have provided key cost savings and enhanced efficiency during this very hectic period," said Aneja.
AI has also helped many brands not only survive through lockdown months, but thrive, with about 44% of executives polled by McKinsey saying the use of AI during the pandemic has reduced their operating costs.
"In fact, some of the big companies like Amazon, Target, Walmart, Costco have seen an uptick in performance during the pandemic. For example, at Amazon the sales have surged ~30% YOY, while for traditional brick & mortar retailer Target, sales grew by 19.8% with 145% growth in digital sales. Having said that, one of the legacies of the 2020 pandemic and the resulting lockdowns is the long list of retailers who have filed for bankruptcy even though many of them experimented with AI and digital. In the long term, AI partnered with human intelligence, can help businesses become more human and deliver greater value to consumers," said Aneja.
More from Fractal and Aneja coming up, including the top 3 tips to improve AI strategy.
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