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AI Guidebook for Retailers Ahead of the 2021 Holiday Season

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The modern retailing industry never sleeps. After an incredibly unique and demanding back-to-school season, retailers now must quickly shift gears and lock in their holiday strategies as well. Unfortunately, during the COVID-19 era, this is easier said than done.

Already plagued by fears over product shortages and long wait times, the 2021 holiday season is set to be one of the most challenging the retail industry has ever experienced. And with that, retailers are scrambling to find ways to navigate this period and deliver the best possible experience to their customers. Fortunately, AI is proving to be a key asset in helping retailers do just that.

Here are a few ways in which AI is helping retailers adapt to the evolving circumstances within the retail marketplace while also helping them drive customer experience success.

Social Media

Making in-season adjustments is imperative to retail success today, and there is arguably no better way to track emerging trends than by leveraging social media data and insights. Through the power of AI and sophisticated data science tools, retailers can synthesize social media insights in real time to better inform decision-making and tweak strategies. For example, by using AI, retailers can track social media developments to identify emerging fashion and product trends and also keep tabs on consumer sentiment toward their brand and its competitors. This enables retailers to get a dynamic perspective on how the market is shaping up and what areas they need to pay closer attention to.

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Customer Journey Analysis and Personalization

Driving conversions is one of the foremost priorities for any retailer, which is why understanding the purchase journey and distinct characteristics of each customer is important. However, given how diverse the shopping landscape has become — thanks to innovations in mobile, web, in-person and voice — building a comprehensive view of each consumer’s path to purchase is an incredibly complex task. With the right AI and data engineering,  however, retailers can synthesize data from all of these touch points to create a consolidated and constantly evolving view of each customer so that they can tailor offerings specifically to what is most important to them.

Dynamic Inventory Maintenance

From BOPIS to next-day delivery, retailers have done a fantastic job of innovating their delivery ops in a short amount of time — especially given the challenging circumstances that have unfolded over the last two years. However, while retailers have done a great job of rethinking their supply chains, consumers have now become accustomed to this new “super convenient” delivery ecosystem. This means that the already stressed holiday supply chain is set to become even more stressed as retailers try to keep up with the new delivery norms that have been rolled out during the pandemic. Quickly, AI and other advanced computing tools are helping retailers adapt.

For example, by using AI, retailers can have better oversight of their inventory and shipping operations to ensure that products are available and ready to be shipped when necessary. Additionally, AI is helping retailers keep better tabs on their supply chain operations as a whole, enabling them to be much more agile and responsive should a disruption or delay occur.

The holiday season is never easy for retailers, and this year is likely not going to be any different. However, by adopting a more sophisticated, AI-driven approach, retailers can successfully manage both the headaches of this holiday season as well as those that lay on the horizon.


Philip Melson leads Fractal’s Global Retail consulting practice and is passionate about retail given its rapid and unprecedented evolution.  Over his 20-plus year career, he’s partnered with or worked for a number of Fortune 500 retailers across six continents.  In those roles, he’s helped unlock a deeper understanding of the strategic opportunities and challenges in their businesses, collaborating with them to develop the analytic frameworks, activation plans and supporting narratives to spur growth, change and innovation.  Melson’s professional interest lies in helping retail leaders successfully and seamlessly integrate AI/ML into their businesses and maximize the impact using his unique blend of analytics, consulting and retail experience.

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