Colombia. 2024 was a challenging year for the retail sector. The forecasts that were made about the importance of the implementation of AI were fulfilled, in a scenario that was seen coming: inflation, geopolitical tensions and a change in consumption habits in terms of e-commerce.
Data-driven strategies and Artificial Intelligence are here to redefine the rules of the game for retailers, allowing them to stay afloat, grow and innovate in their offering. This was indicated by a report by EPAM Systems Inc.
A year of global challenges and local changes:
2024 was not an easy year for the retail industry. In many countries, there was economic uncertainty and consumer purchasing power declined, while operating costs continued to rise, in part due to the continued growth of e-commerce.
It was predicted that e-commerce would represent 20% of global purchases this year, and it was a very accurate projection. Throughout the year, retailers have been tasked with developing hybrid models that mix the best of physical and digital commerce, facing barriers such as the high cost of operating online channels and consumer demands for services such as fast shipping and free returns.
In addition, the rise of competitors promoting ethical, local and sustainable values put even more pressure on traditional actors, forcing them to rethink their value propositions for an increasingly conscious and demanding public.
The transformative impact of AI in retail:
2024 was a turning point in the adoption of artificial intelligence as a driver of competitiveness. The report published by EPAM points out that companies that invest in AI to optimize their operations would achieve tangible improvements in efficiency, costs and revenue.
And 2024 has left several lessons and achievements for the sector:
Data integration as the basis for innovation:
Retailers that have consolidated their data along the entire value chain—from product acquisition to sale—have been able to build robust models that power AI-based solutions. This approach allows for a comprehensive view of the business, fostering more effective innovation.
Efficiency as a competitive advantage:
Machine learning solutions have generated significant savings by optimizing key processes such as inventory management, dynamic pricing, and customer acquisition. It's an approach that helps retailers maintain healthy margins, even in a high-volatility environment.
Personalization to build customer loyalty:
The use of AI to analyze consumer behaviors and preferences has been key to delivering more personalized experiences, increasing satisfaction and reducing return rates.
Sustained growth through new channels:
Digital media optimization and the adoption of AI-powered retail media strategies have enabled retailers to maximize the impact of their marketing investments and reach new market segments.
A positive balance for innovation in retail
While the challenges of 2024 tested the resilience of the industry, this year's experience leaves a clear message: technology, and particularly AI, is an indispensable ally to face an environment of rapid change and growing demands.
For EPAM's experts, those retailers that dare to continue investing in technological innovation will have a significant competitive advantage by 2025 and beyond.
To learn about the EPAM study, click here.
