A.I. s role in fueling the supply chain.

Transcription

1 A.I. s role in fueling the supply chain. Results of our survey of nearly 200 retail industry execs. Underwritten by:

2 Moderating Al McClain CEO, Co-founder, RetailWire Al McClain has spent 30+ years in the retail, tech, and CPG spaces. Al's career highlights include sales and management stints with Luzianne-Blue Plate Foods, Bestfoods, Red Rose Tea, and Progressive Grocer (Trade Dimensions and Retail Insights divisions). Al has also spoken extensively at industry events for the National Grocers Association, the Institute for International Research, the Magazine Publishers Association, and the Category Management Association. He has written for publications such as Nielsen Wire, Loyalty Management, and Forbes.com.

3 About RetailWire Largest expert discussion site in the retailing industry 60,000+ active users per month 32,000 subscribers 50,000+ social media followers Unique BrainTrust of industry experts 125+ panelists

4 Today s Agenda Welcome (3 min) STUDY RESULTS: A.I. s role in fueling the retail supply chain (20 min) Jennifer Van Cise, IBM PANEL DISCUSSION (25 min) Jennifer Van Cise, IBM James Tenser, VSN Strategies Mark Heckman, Mark Heckman Consulting Q&A (10 min) Panelists, Audience

5 Featured Presenter Jennifer Van Cise Vice President, Industry Solutions & Business Development, US Distribution Market, IBM In her current role at IBM, Jennifer manages a portfolio of solutions, including IBM Watson, cognitive analytics, commerce, Internet of Things, mobility, cloud, and big data to address clients challenges in areas such as Supply Chain Optimization, Store Operations Modernization, Consumer Engagement, and IT agility. An IBM operations executive and professional for over 20 years, Jennifer earned her BS in Industrial Engineering from Purdue University and her MBA from the Fuqua School of Business at Duke University.

6 Artificial intelligence

7 Artificial intelligence

8 Methodology June - July, 2017 Retailers, wholesalers, brands, vendors Nearly 200 responses considered

9 Methodology What type of company do you work for? Consultancy, agency, design firm Other 24% Technology or solutions provider 10% 27% 29% 11% Retailer, wholesaler Brand marketer/manufacturer

10 Methodology What best describes your job position? Non-management 25% 28% Executive management, owner 23% 22% Department manager Senior management

11 Building a case for A.I. The three biggest challenges faced by retail supply chains (Select up to three) All respondents Brand marketer/manu facturer Consultancy/ag ency Retailer/wholes aler Technology/sol utions provider Difficulty predicting demand for purchasing and procurement 62% 56% 66% 67% 50% Integrating and interpreting data from different sources and systems 61 % 56% 71% 52% 61% Inability to predict and prevent supply chain disruptions 46% 44% 34% 60% 47% Lack of visibility into in-stock positions 39% 50% 37% 31% 50% Inability to pinpoint demand origin 30% 25% 26% 38% 29% Inability to control and track inventory between locations 29% 13% 37% 31% 24% Lack of product traceability 18% 13% 21% 10% 21%

12 TIE Malfunctions, fraud, and theft, oh my! Top three sources of supply chain risk, as rated by survey segments Brand marketer/manufacturer Consultancy/agency, design firm Retailers Technology/solutions providers Cybersecurity/fraud/theft Cybersecurity/fraud/theft Cybersecurity/fraud/ theft The proliferation of indirect suppliers The proliferation of indirect suppliers IT-related malfunctions IT-related malfunctions IT-related malfunctions Traceability difficulties Weather, natural disasters IT-related malfunctions Man-made disruptions Traceability difficulties THREE WAY TIE

13 Familiarity with the application of A.I. in the retail industry Unfamiliar 18% 30% Familiar Somewhat familiar 51%

14 Top area in retail where A.I. has potential to make the biggest impact Supply chain 26% Customer service 21% E- and m-commerce 18% Marketing, advertising Store operations 10% 10% Pricing Merchandising 7% 8%

15 Importance of A.I. in helping retailers achieve a customer-centric supply chain Somewhat unimportant 2% Somewhat important 23% 29% Critical 47% Very important

16 Biggest A.I. Impact on the supply chain in 5 years will be Demand management 27% Identifying and addressing internal problems (e.g., process inefficiencies) Real-time supply chain updates 20% 19% Accelerating the last mile (e.g., drones, self-driving vehicles) Robot-assisted production 10% 13% Mitigating disruptions from external events (e.g., weather, port delays, cybersecurity) 8% Quality control 5%

17 Biggest A.I. Impact on the supply chain in 5 years will be Demand management 27% Identifying and addressing internal problems (e.g., 20% Consultants: process De-emphasize inefficiencies) identifying internal problems and suggest A.I. will Real-time have a big supply impact chain on updates accelerating the last mile. 19% Accelerating the last mile (e.g., drones, self-driving Tech providers: Real-time supply chain updates fall out 13% of their top 3. vehicles) Instead, see quality control and mitigating disruptions from external events as Robot-assisted having bigger production impact. 10% Mitigating disruptions from external events (e.g., weather, port delays, cybersecurity) 8% Quality control 5%

18 Blockchain Internet of Things Artificial intelligence Internet of Things poised for more near-term impact Please indicate which technology will have the biggest impact on the supply chain during the following time periods months 40.7% 43.9% 15.5% 5 years 55.5% 32.8% 11.8% months 50.0% 35.8% 14.2% 5 years 37.2% 40.5% 22.3% months 10.6% 20.3% 69.1% 5 years 9.8% 25.4% 64.8% #1 #2 #3

19 Structural and cultural changes For the retailers and/or manufacturers you work with, which appears to be the toughest challenge in implementing artificial intelligence? Re-engineering business processes to fully benefit from A.I. Cost of implementing A.I. technology Lack of management commitment 21% 20% 22% Staff resistance to change/concerns about automation Integrating with existing data of questionable quality Integrating with legacy systems 9% 10% 12% Cost of upgrading networks to speeds adequate to support cloud computing 6%

20 The next big disruptor Please indicate where the retailers and/or manufacturers you are involved with are in implementing the following types of technology. Robotics 36.1% 25.4% 12.3% 14.8% 12% Internet of things 20.3% 34.2% 16.3% 19.5% 10% Biometrics 52.9% 19.8% 9.9% 9.1% 8% Visual or voice-activated search 39.7% 32.2% 11.6% 11.6% 5% Artificial intelligence 31.2% 32.8% 15.2% 16.8% 4% Blockchain 60.7% 20.5% 12.3% 3% 3% Virtual reality 47.5% 27.9% 11.5% 13.1% 0% No plans Planned Budgeted In process Implemented

21 We ll give you an opportunity to download a concise report summary at the end of the webinar. Stick around for a copy of the report...

22 PANEL DISCUSSION A.I. s role in the retail supply chain Jennifer Van Cise IBM James Tenser VSN Strategies Mark Heckman Mark Heckman Consulting Al McClain RetailWire

23 RetailWire BrainTrust Panelist James Tenser Principal, VSN Strategies James ( Jamie ) Tenser is an analyst and consultant to the retail and consumer products industry. His firm, VSN Strategies, focuses on retail technology, merchandising, marketing, consumer behavior, Shopper Media, Category Management, service practices, and all-channel retailing. He is Executive Director and founding member of the In-Store Implementation Network. Tenser is considered an authority on retailing, brand marketing, and consumer trends, and is author of two books.

24 RetailWire BrainTrust Panelist Mark Heckman Principal, Mark Heckman Consulting Mark is a supermarket industry veteran, having worked as Director of Marketing Research at Marsh Supermarkets, VP of Marketing for Randalls Foods, and at MARC Advertising and Valassis Relationship Marketing Systems. In 1993, Mark led the analysis team at Marsh that composed and presented the Marsh Super Study, which later became a case study at the Harvard School of Business. Upon completion of his duties at Marsh, Mark returned to his consulting practice where he currently works with retailers, marketing services and technology companies to develop successful programs and partnerships.

25 Audience Poll Question In the new Amazon/Whole Foods relationship, which company will learn more from the other about running an efficient grocery supply chain?

26 PANEL DISCUSSION A.I. s role in the retail supply chain Question 1: Amazon/Whole Foods announced last week that they will lower prices on many staple Whole Foods products in stores and offer a range of 365 private label items through Amazon s online channels. How do you see Amazon using A.I. to supercharge Whole Foods supply chain and improve efficiency?

27 Audience Poll Question How receptive is middle and upper management in your organization to new tech innovation initiatives?

28 PANEL DISCUSSION A.I. s role in the retail supply chain Question 2: As the survey showed, retailers see predicting demand as a big trouble spot and are looking to A.I. as a solution. But once the decision is made, how should companies prepare? Talk for a minute about the organizational impact when traditional merchants/buyers make the transition to artificial intelligence and automated systems.

29 Audience Poll Question In the next two years, which omnichannel service would get your highest priority if you were running a retail chain?

30 PANEL DISCUSSION A.I. s role in the retail supply chain Question 3: Walmart has put great emphasis on BOPIS (buy online/pickup in-store) in the last few years, and is now reportedly seeing performance gains as a result. How can A.I. make the difference between success and failure in BOPIS efforts?

31 Audience Poll Question Which of the following retailers gets your vote as the best A.I. in Supply Chain Star for using the technology to create better customer experiences?

32 PANEL DISCUSSION A.I. s role in the retail supply chain Question 4: A.I. Supply Chain Stars What retailers do you think of when it comes to the innovative, forward-thinking use of A.I. in supply chain management? (Please name two.) How are their innovative practices improving customer experience?

33 Audience Q&A Jennifer Van Cise IBM James Tenser VSN Strategies Mark Heckman Mark Heckman Consulting Al McClain RetailWire YOUR QUESTIONS FOR THE PANEL...

34 MORE INFORMATION Priority code: Distribution For RetailWire: Al McClain (561)

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