AI in Retail :
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The
Untapped Trend Filipino Business
Have Yet to Embrace
5
AI in Retail :
The Philippines placed last in the Asia Pacific AI Readiness Index 2023 among 12 countries based on combined efforts of both public and private sectors for artificial intelligence ( AI ) adoption . In light of this challenge , how can Filipino retailers best prepare and integrate AI into their operations ?
AI significantly boosts operational efficiency for retailers dealing with price-sensitive consumers and a volatile market . In the Philippines , retail companies often rely on manual or semi-digital supply chain management systems . These traditional approaches strain retailers due to their time-intensive nature , encompassing tasks such as inventory management , procurement , sourcing , logistics , and distribution . This leaves little bandwidth for critical review and analysis , hindering operational advancements .
Adopting AI-driven automation in supply chain management enables retail firms to swiftly streamline inventory processes across diverse store networks , despite managing vast data sets . This innovative approach not only expedites operations but also empowers retailers with intelligent data analysis , allowing them to optimize operations and elevate customer experiences to new heights through effective insights leveraging .
Furthermore , AI platforms are commonly plug-and-play and cloud-based which offers easier user interface and improves accessibility across teams for more efficient reviews and data exchange . How would this look like in everyday work setup for retail teams ? The procurement and sourcing teams utilize the service to access real-time demand insights , aiding them in informed decision-making during raw material or product sourcing . This data set is also accessible to the logistics and distribution teams , allowing them to optimize transportation and warehousing strategies . The inventory management team leverages the same data for maintaining optimal inventory levels and minimizing stockouts , while the pricing and promotions team utilizes it to drive sales and enhance profitability .
In effect , AI equips retailers with the ability to streamline operations and sales regardless of their scale or geographic location — whether managing ten or a hundred stores across Luzon , Visayas , or Mindanao .
Despite these benefits , AI adoption in retail in the country is still primarily limited to larger retail companies . With the industry becoming increasingly driven by the omnichannel environment , retailers of all sizes can benefit from harnessing AI . Unlike their larger counterparts , small and medium businesses ( SMBs ) often operate with limited resources and face challenges such as tighter budgets , smaller teams , and less sophisticated technology infrastructure . AI offers SMBs an opportunity to level the playing field by providing access to advanced capabilities that were previously only available to larger companies .
For instance , AI-powered systems allow SMBs to compete with larger counterparts in terms of optimizing stock levels and improving cash flow . Personalized marketing campaigns powered by AI help SMBs effectively target and engage customers , creating a competitive edge in customer relations . The ability to dynamically adjust pricing strategies based on real-time data also allows SMBs to maximise profits and reduce losses .
Furthermore , the Department of Trade and Industry ( DTI ) has also started pushing for the establishment of the Center for Artificial Intelligence Research in October 2023 . This initiative is seen to help small and medium businesses in the country to effectively adopt AI in their business operations .
AI ’ s tremendous impact on operational efficiency also comes with the woes of job displacement for employees which becomes roadblocks to AI adoption . These companies have to recognise the necessity to shift the behavior and perception of employees towards digitization , especially when existing systems are functioning adequately . AI is crucial as retailers step up with their products and services to more customers as manual operations become unsustainable amid growth in an omnichannel space .
But this doesn ’ t necessarily signal displacement . Market developments suggest that increasing human interactions with AI indicates it is not replacing humans at this time as customers value personal engagement . In ecommerce , Filipino consumers prefer conversing with agents over automated customer service . In physical stores , they heavily depend on employees for guidance in locating products and their assistance at checkout . Recent closures of self-service checkouts in the United Kingdom and the United States also underscore the importance of human interaction in customer experiences . If any jobs are affected by AI and automation , it presents an opportunity to upskill workers for roles in other departments , enhancing both backend and customer-facing operations .
Despite the challenges , AI has become an undeniable interest and priority for organizations across both private and public sectors . Numerous initiatives are being pursued to ensure that businesses of all sizes are included in the transition towards AI integration . For retailers , these trends indicate that now is the opportune moment to begin exploring AI incrementally , paving the way for long-term adoption . Doing so will enable sustainable growth , ensuring agility and competitiveness in today ' s rapidly evolving environment .
Donald " DJ " Felbaum is the Head of Sales for the Philippines at RELEX , the global leader in supply chain and retail planning . With a wealth of experience in retail technology and a deep understanding of the APAC retail landscape , DJ spearheads initiatives to introduce RELEX ' s innovative solutions to retailers across the region . Leveraging RELEX ' s advanced AI-powered technology , the seasoned sales leader collaborates closely with clients to deliver tailored solutions that address unique challenges , optimize supply chain operations , and unlock new opportunities for profitability .