Artificial intelligence (AI) is continuing to drive monumental shifts in the retail sector. Predicted to be worth $15.3 billion by 2025, some 77 per cent of major UK retailers are looking to deploy the technology this year as they strive to improve their customer experience.
So far, most retailers who have adopted AI have done so purely with efficiency and the bottom line in mind, but many are realising that AI also can be a powerful tool for businesses looking to improve their sustainability and ramp up their green credentials.
Recently, the eyes of the world were on Glasgow as world leaders gathered for COP26 – the United Nation’s climate summit.
Tackling the climate crisis will undoubtedly require a combined public, governmental, scientific and technological effort on a wide scale, and AI could play a key role.
In fact, research by PwC revealed that implementing AI to make decisions about environment-related areas including agriculture, water, energy, and transport could add more than $5 trillion to the global economy over the next decade.
There are six key ways that retailers can adopt AI in order to drive their sustainability:
Forecasting can be a very valuable tool for retailers, specifically fashion merchandisers, as precisely honed forecasts allow them to calculate exactly how many cases to buy of a particular item.
Textile waste is a significant problem in the fashion industry and AI can ensure tight supply chains, aligning demand and supply.
Burberry infamously burned surplus stock in 2017, to restrict supply of their most exclusive and desired products, maintaining high prices and their luxury status.
The fashion house burned a total of £28.6 million garments, in an extreme example of incorrect, imprecise forecasting.
“Despite their high prices, Burberry shows no respect for their own products and the hard work and natural resources that are used to make them,” Former Greenpeace campaigner Lu Yen Roloff told the BBC in 2018.
“The growing number of overstock points to overproduction, and instead of slowing down their production, they incinerate perfectly good clothes and products.
“It’s a dirty secret of the fashion industry. Burberry is just the tip of the iceberg.”
However, the brand has now integrated AI and claims to be an “end-to-end digital business,” a move that Greenpeace described as a “much-needed sign of a change of mind in the fashion industry.”
AI also plays a key role in optimising warehouse operations, in terms of delivering to customers and moving goods between distribution centres.
AI technology offers a more accurate estimation of what product needs to go where and when, therefore businesses can better anticipate and cater to demand.
Therefore, truck capacity and space on logistics fleets can be maximised and unnecessary journeys minimised.
AI’s insights can lead to fewer trucks on the road, planning more eco-friendly delivery routes and streamline journeys between distribution centres.
The pre-loved fashion industry has recognised the potential of AI and is leveraging it to offer an innovative customer experience.
Dutch tech fashion retailer Project Cece has a large online marketplace for sustainable clothing.
The company uses Pixyle’s visual AI engine which allows shoppers to upload photos of their desired items and find sustainable options.
“We knew that an easier way to find sustainable clothes was something you had been hoping for, so we’ve partnered with Pixyle.ai to make it happen,” the company’s website reads.
“By combining their expertise with Project Cece’s sustainable approach to clothing, our highly intuitive ethical fashion image tool was born.
“All you have to do is click on it or drag and drop the image of the look that you’d like to replicate. Our ethical fashion AI will work its magic within a few seconds, and you’ll be presented with the best sustainable products to match your outfit vision.”
This technology transforms a generic experience into a personalised one and enhances Project Cece’s customer experience.
From the eyes of a conscious customer, businesses frequently cross-sell and upsell their products.
Therefore, if sustainable initiatives are not made clear to the consumer, it could lead to many lost opportunities.
AI enables businesses to personalise communications such as marketing emails and notifications.
This allows brands to learn and target the specific behavioural cycle and habits of an individual customer, enabling them to operate lean and sustainably.
When shopping online, customers often search with specific keywords such as “sustainable wool coat” or “100% cotton”.
AI tagging solutions create detailed product tags, content and a standardised taxonomy for an improved search and discovery.
Popular AI-powered catalogue management service Vuetag has seen a 51 per cent increase in catalogue accuracy for retailers who use the software.
When customers can find exactly what they are looking for, there is less bulk buying and guesswork, resulting in fewer returns and a reduced carbon footprint.
Real time trend reports
AI can generate real-time sales and market trend reports for companies, providing powerful insights, analysing transactions and patterns.
This AI-generated information is helpful when assessing work operations and what direction a retailer needs to move towards on a consistent basis.
It also transforms a previously long, time-consuming and paper-heavy task into a more efficient operation.