Retailers are increasingly using AI-powered solutions and dynamic pricing models to outperform rivals that rely on traditional tools and approaches.
A Revolutionary Suite of Retail AI Solutions
Using holistic, tailored retail intelligence software, our Retail AI by BCG X technology unlocks critical advantages across the six vital components of the value chain. Establish competitive advantage with Retail AI by ensuring the availability of goods and services, examining customer data, and predicting future behavior.
5%–7%
uplift in sales
2pp–5pp
increase in operating profit margin
Up to 50%
boost in EBITDA
10%
gain in functional productivity
Artificial intelligence will be at the core of every future retail transformation. Retailers must modernize their commercial, operational, and supply chain functions to build for that future. To accelerate this journey, BCG X developed Retail AI, a suite of proprietary tools that leverages advanced analytics and technology for retail sustainability across the value chain. Retail AI is built into your existing environment—with your data and your people—to help develop unique, highly actionable solutions that are customized to your business.
Retail AI’s six interconnected teams partner with clients to develop an overarching AI in retail strategy, define a multiyear transformation roadmap, and establish an advanced business unit to drive progress. With our Retail AI technology comes a complete transformation, enabling stronger forecasting, the build of customer-driven assortments, and omnichannel differentiation for price positioning, distribution plans, hyper-personalization strategies—as well as improving sustainability and carbon reduction across the value chain.
Retail AI’s six interconnected teams partner with clients to develop an overarching AI in retail strategy, define a multiyear transformation roadmap, and establish an advanced business unit to drive progress. With our Retail AI technology comes a complete transformation, enabling stronger forecasting, the build of customer-driven assortments, and omnichannel differentiation for price positioning, distribution plans, hyper-personalization strategies—as well as improving sustainability and carbon reduction across the value chain.
WHY RETAIL AI
Enhancing Core Strategy with AI in Retail
Combining the power of traditional AI with generative AI, our Retail AI solutions include six teams working together to boost effectiveness, efficiency, and innovation.
Building Retail AI Solutions Across the Value Chain
Retail AI takes BCG’s deep retail strategy experience and unites it with BCG X’s Retail AI technology for up-to-the-minute business solutions, using a comprehensive AI execution model built on BCG’s 10/20/70 rule: 10% dedicated to creating a portfolio of high-impact use cases, ignited by an initial strategy that delivers value fast; 20% to building an integrated data and technology system; and 70% to transforming people and operating-model capabilities.
The solutions we develop are targeted to provide differential value, seamlessly integrating into your tech and data environment without unnecessary spending or replatforming. Retail AI accelerates progress by taking a business-first, algorithm-backed approach to support the scaling of these tools, demonstrated by six synergistic domains unlocking unprecedented value.
Our Clients’ Success with Retail AI
Grocer in Europe
A leading European grocer used Retail AI by BCG X to drive its future loyalty, promotion, and marketing transformation. Retail AI helped reconfigure the client’s mass and personalization campaigns by building a state-of-the-art analytics system, optimizing promotion effectiveness and delivering 140 bps in margin improvement, equivalent to $150 million.
$150 million
in margin improvement
Global Tire Manufacturer
An international tire company faced a complex assortment and geographical diversity problem, needing to stock the right tire, in the right store, at the right time. Using Retail AI by BCG X, BCG helped the company’s retailers shift to a data-driven selling model, resulting in significant value creation across several dimensions while increasing sales by up to 12%.
6%–12%
sales increase
Meet Our Retail AI Technology Team
Overwhelming consumers with elaborate promotions, discounts, coupons, and loyalty rewards can weaken consumer loyalty, tarnish brand reputation, and suppress new revenue opportunities. Instead, retailers should adopt a streamlined, customer-centric approach.
There’s gold at the end of the personalization rainbow. To get it, retailers need to focus on the customer experience, technology, and operating models.
Smart use of pricing techniques boosts not only revenue but also store traffic, brand perception, purchase frequency, and customer loyalty. And it delivers results fast.
Artificial intelligence can provide optimized solutions to three key retailer concerns: rising cost of goods, declining consumer spending, and supply chain volatility.
Traditional retailers face an increasingly urgent need to reinvent multiple aspects of their businesses to ensure that their models are competitively viable today and sustainable for the future.
In their relentless focus on financial performance, many grocers have begun taking their customers for granted. As the market becomes more crowded—with growing competition from discount chains and other retailers—grocers must understand the unique needs of their customers and reorient their organization to meet those needs more effectively.
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New capabilities put retailers in a position to leverage AI and generative AI to obtain a clear picture of what a product should cost and how its suppliers stack up.
Many retailers struggle with pricing strategy, technology, and decision making. Some have trouble getting started; others rush in. Here’s a roadmap to avoid costly mistakes.
Brick-and-mortar retailers rely heavily on promotions yet often lack a strategic approach. Implementing a four-part solution can help increase promotion margins by 2 to 5 percentage points.
Brick-and-mortar retailers must adopt improved data analytics as part of a broader strategy to optimize localization and keep customers coming through the door.
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The environmental, economic, and health benefits of meat grown from animal cells are clear. Cost and taste parity are on the horizon. What will it take to scale up cultivated meat in the UK?
The impact could be rapid and significant. Scenario-based planning is critical to being ready to act.
As the global business landscape grows more complex and politically fraught, companies are struggling to balance cost reduction, supply chain resilience, and access to key markets.
CFOs can maintain a relentless focus on value creation by serving as strategic advisors to business leaders, overseeing performance, and communicating a persuasive equity story to investors.
BCG’s survey research found that spending habits vary significantly depending on the category and demographic. Success for retailers will hinge on precision-driven, data-backed strategies.
Retailers are increasingly using AI-powered solutions and dynamic pricing models to outperform rivals that rely on traditional tools and approaches.
Overwhelming consumers with elaborate promotions, discounts, coupons, and loyalty rewards can weaken consumer loyalty, tarnish brand reputation, and suppress new revenue opportunities. Instead, retailers should adopt a streamlined, customer-centric approach.
There’s gold at the end of the personalization rainbow. To get it, retailers need to focus on the customer experience, technology, and operating models.
Retailers are increasingly using AI-powered solutions and dynamic pricing models to outperform rivals that rely on traditional tools and approaches.
Overwhelming consumers with elaborate promotions, discounts, coupons, and loyalty rewards can weaken consumer loyalty, tarnish brand reputation, and suppress new revenue opportunities. Instead, retailers should adopt a streamlined, customer-centric approach.
Facing a disrupted consumer environment, F&L brands need to likewise disrupt their usual approach, by planning sales strategies more than a year in advance.
Innovative retail leaders invest more in creative endeavors and gain higher returns as a result, according to new research from BCG and the World Retail Congress.
Overwhelming consumers with elaborate promotions, discounts, coupons, and loyalty rewards can weaken consumer loyalty, tarnish brand reputation, and suppress new revenue opportunities. Instead, retailers should adopt a streamlined, customer-centric approach.
Artificial intelligence can provide optimized solutions to three key retailer concerns: rising cost of goods, declining consumer spending, and supply chain volatility.
Here’s what matters most to consumers—and what brands and retailers should be focused on—as we enter the biggest sales event of the year.
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