Sara Meza in Retail Tech Insights: Why AI is Essential in a Time of Retail Uncertainty

Read the original article in Retail Tech Insights here.

Tariffs, geopolitical conflicts, and a slowdown in consumer spending are creating massive challenges for retailers as they scramble to figure out the best strategies moving forward. Retail uncertainty is at its highest level since COVID, and retailers must not only plan for volatility, but also adapt in real time. 

When these kinds of challenges arise, AI proves its value more than ever. The retail industry has already embraced AI; Coresight Research estimates that the GenAI market is growing at 31.1% CAGR and will reach $235B in 2028. Retailers clearly understand the value of AI. In a time of turbulence, it’s especially critical. 

Retailers need to make the best possible decisions with speed and precision. With tariffs, for example, retailers are moving production to low-tariff regions, negotiating with suppliers to reduce costs, and determining how to strike the right balance between absorbing price increases and passing them along to consumers. All those decisions have ripple effects throughout the product lifecycle. 

Consider a women’s specialty apparel brand adjusting a best-selling blouse to lower production costs — removing a button to shorten sewing time, switching to a more cost-effective fabric, or simplifying assembly steps. While the blouse may look nearly identical to the consumer, the product has fundamentally changed. Those changes impact the product’s attributes, which must be updated in Master Data Management (MDM) and Product Experience Management (PXM) systems and then reflected across assortment planning, allocation, pricing, and merchandising tools.  

Now multiply that process across hundreds or thousands of SKUs being modified due to shifting tariffs or cost pressures. Without AI-powered systems, connected data, and automated workflows, the scale of change becomes unmanageable—and opportunities are lost to move faster, reduce costs, and protect margins. 

Siloed Systems Are a Barrier to Retail Decision-Making

A seamless flow of information in the retail enterprise is critical. There’s a catch, though: most retailers today operate in silos, and data is often fragmented, disconnected, and inconsistent. Without a central repository or a single version of the truth, cross-functional teams may work with outdated information, leading to inefficiencies, as well as errors in data pricing, promotions, and inventory.  

In a time of uncertainty, retailers need unified data management — a single source of truth for all teams — to take full advantage of AI analytics. They also need to ensure they invest in areas that can deliver quick impact where it’s most needed. Retail analytics and automated insights can power real-time decisions on pricing, assortments, merchandising, markdowns, order management, and much more. A unified data foundation can unlock a range of innovations in areas throughout the retail enterprise. 

Where AI Can Have the Greatest Impact Now 

AI’s biggest strength in today’s environment is its ability to scale decisions and actions across thousands of SKUs, suppliers, and customer touchpoints, in near real-time. Here are some of the most immediate, high-impact areas where retailers are seeing value from AI: 

• Product Information Management (PIM): Automates the creation of rich, accurate product content at scale, empowering retailers to deliver consistent, high-quality experiences across channels while keeping pace with rapidly expanding product catalogs. 

• Gen AI Automated Product Attributes: Updates the specs on existing products that are changing, as well as new products that retailers may introduce to attract price-sensitive shoppers. 

• GenAI Copy: Automatically generates product and marketing copy in a retailer’s brand voice, enhancing the consistency and quality of content. 

• Lifecycle Pricing and Promotions: Recommends best pricing strategies in response to wholesale price increases due to tariffs, as well as the nature and frequency of promotions in light of consumer price sensitivity. This is especially important as retailers enter the all-important Back-to-School and holiday seasons.   

• Merchandise Financial Planning: Dynamically adjusts merchandise financial plans based on real-time data, improving precision and agility in budgeting, sales forecasting, and open-to-buy decisions. 

• Assortment Planning: Localizes and tailors assortments with greater accuracy by analyzing consumer demand signals, trends, and performance data, ensuring the right mix of products by store, channel, and season, 

• Forecasting and Allocation: Uses AI to anticipate demand shifts and make smarter allocation decisions. With global disruptions impacting logistics and rapid changes in consumer demand, this will be key to staying agile and avoiding both overstocks and out-of-stocks. 

Empower Associates With Agentic AI 

Agentic AI may be the ultimate game-changer for retailers. Unlike traditional AI, which focuses on answering questions or summarizing information, agentic AI takes it further — performing tasks, initiating workflows, and interacting with software to drive measurable results. The most advanced AI platforms combine agentic AI with large language models (LLMs) to both reason and act, creating a closed loop of intelligent decisioning and execution. 

This means that agentic AI can automatically adjust pricing across thousands of SKUs in real time, automate product content updates, identify compliance risks, and trigger governed workflows across systems like PIM, ERP, and digital shelves.  

Agentic AI transforms efficiency, empowering teams to automate the execution layer of business operations with governance, accuracy, and scale. By extending the capabilities of AI in new ways throughout the enterprise, it can be the secret ingredient that helps retailers thrive, not just survive, in challenging times.