Legacy tech giants Microsoft and SAP are elbowing into the retail industry’s rapid adoption of artificial intelligence, hoping their new tools will help retailers struggling to keep pace with changing consumer behaviors and unrelenting market volatility.
This week, ahead of the National Retail Federation’s flagship conference (Jan. 14-16), Microsoft and SAP have each unveiled new AI-powered capabilities aimed at providing retailers with more predictive analytics, automated operations and enhanced customer experiences.
The push for generative AI in retail
SAP announced today several additions to its supply-chain management and order orchestration offerings, infusing them with AI to enable retailers to create “highly automated” replenishment processes while providing customers with granular fulfillment updates.
Meanwhile, Microsoft touted new integrations of its Copilot AI into Dynamics 365 applications to help retailers generate customer insights and optimize marketing campaigns. It also introduced retail-specific AI templates and data connectors to accelerate AI adoption.
“Retailers are looking for ways to begin working with generative AI that will allow them to learn quickly and scale effectively,” said Shelley Bransten, CVP of Global Retail, Consumer Goods, and Gaming industries at Microsoft in a statement.
Retail’s AI investment surge
In business terms, both SAP’s and Microsoft’s new AI-driven tools aim to translate complex data into business insights, streamline operations, and enhance customer experiences — all with the goal of increasing efficiency and profitability.
As retailers grapple with the challenges of digital transformation and broader changes in consumer behaviors, Microsoft and SAP are strategically positioning themselves as essential partners in the retail sector’s AI revolution.
The market backdrop explains the retail AI push from both companies. About 87% of retailers globally have already implemented AI in some form, according to Microsoft-sponsored research. Similarly, Fortune Business Insights reports artificial intelligence in the sale of goods or services is anticipated to reach $31.2 billion in 2028.
The AI edge in retail
The announcements underscore the critical role AI is expected to play in retail’s future. As the sector adapts to an increasingly digital and data-driven environment, SAP and Microsoft are setting a competitive standard with their latest AI offerings, underlining the importance of strategic investment in technology to stay ahead.
Retailers grappling with digital transformation challenges are likely to find Microsoft and SAP’s new AI-driven tools as critical assets in their quest for efficiency, customer satisfaction, and ultimately, profitability.
The industry will be watching closely as these tools are put into practice and begin to shape the future of retail operations and customer experiences.
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