How leveraging AI can help make next Christmas a cracker

The recent Christmas trading period in the UK retail sector has been a tale of contrasts, with some household grocers managing to achieve positive results while others faced significant challenges.

According to data from the Office for National Statistics, overall sales volumes fell by 0.3% in December 2024, reflecting the impact of factors such as increased business national insurance contributions and a challenging economy.

Despite this, certain retailers, including Tesco, have managed to improve their market share during this difficult period.

In the fashion and department store segments, the picture is equally mixed, with some of the best performing brands missing their targets during the festive period.

Connecting with consumers

One consistent theme in the retail industry is the importance of a solid supply chain and the ability to connect with consumers to stay on trend and meet their needs. Retailers must continually review both their in-store and online experiences to keep customers engaged and coming back.

This raises the question of how to create a robust supply chain with effective forecasting capabilities and uninterrupted automation. Additionally, retailers need to differentiate their customer experience at brick-and-mortar stores to be best-in-class, taking cues from market leaders.

Some leading organisations have already integrated AI into their planning and forecasting capabilities, providing them with a competitive edge.

Retailers should recognise that AI models require a lead time to learn and produce distinguished outcomes. Those who invested early in these capabilities are already reaping the benefits of their foresight.

Addressing efficiencies with AI

Agent-based AI is gaining traction in empowering frontline staff (rather than displacing them). This approach, which is expected to grow significantly in market size by 2030, can help associates address customer queries, streamline returns processing and capitalise on personalised up-sell/cross-sell opportunities.

By leveraging AI-powered assistants, retailers can create efficient inventory management, consistent planogram compliance, streamlined checkout processes and reliable theft detection and loss prevention.

The question arises as to whether retailers should use below-average Christmas trading results to delay investment in intelligent technology.

The implications of such a decision could be significant, as seen in the rapid disappearance of beloved brands from the high street. Instead, retailers should consider identifying efficiencies in their operations to maintain their technology investments, ensuring that they remain competitive in an ever-evolving retail landscape.

In conclusion, the retail sector’s response to the challenges posed by Christmas trading results and broader economic factors will be crucial in shaping its future.

Embracing intelligent technology and leveraging AI capabilities can provide retailers with the tools they need to navigate the complexities of the market, differentiate their offerings and stay ahead of the competition. 

To make the most of 2025, click here to find out more about how the retail sector might leverage GenAI.