Retailers Are Strapped for Time, Money and People. Here's How AI Can Offer a Helping Hand – Entrepreneur
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By Dax Dasilva Edited by Micah Zimmerman
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When you run a retail business, it’s easy to rack up big bills.
As just one example, it can cost upward of $20,000 to have a developer build a custom ecommerce website. For many of the retailers I work with, that price tag can be daunting, or even out of reach.
Financially, retailers are more squeezed than ever right now, with an average net profit margin of just 4.5%. Inflation, staffing issues and high fixed costs like rent all eat away at slim profits. The uncertainty around tariffs definitely isn’t helping, either.
That leaves owners in a tough bind. They don’t have the capital to hire help. But they’re already stretched thin themselves, juggling everything from merchandising and inventory management to HR and IT.
Luckily, support is increasingly available in the form of AI and automation.
I’ve seen from the frontlines how retailers are leveraging this technology to change how they work. In some cases, it’s like bringing on a new team member.
Here are four ways retailers can use AI and automation to save time and money — and give their business an edge.
Related: These Are the 50 Best AI Tools Right Now
You’ve heard of “vibe coding.” Well, get ready for vibe website-building.
A robust ecommerce site is table stakes for any retailer, but getting one built has required an investment. Not anymore. New AI-powered tools let retailers quickly create a fully customized site from scratch, without any coding or third-party developers. Just describe what you want or share a screen grab, and AI takes care of the rest.
Now that you’ve built a great site, it’s time to populate it. In the past, that called for a graphic designer, a writer, a photographer and maybe a videographer. AI can fill those roles by penning product descriptions, touching up photos and generating images and even video.
Of course, great content doesn’t mean much if it doesn’t convert. A new generation of AI tools is helping retailers optimize and measure the performance of their digital content, be it web pages or social media posts. AI-powered apps take the guesswork out of SEO marketing by tracking metrics, diagnosing issues and automating tasks. There are also plenty of AI tools for managing social media, whether that’s scheduling content, keeping tabs on performance or surfacing insights about your customer base.
Inventory — having the right stuff in stock at the right time — can make or break a retail business. If an item is out of stock, two-thirds of shoppers will bail on a physical store or retail site. Worse, they might never come back.
Planning what to sell and keeping up with shifting trends and seasonal patterns has always been a mission-critical retail role — and a time-consuming one. Fortunately, technology is picking up the slack. The latest tools help with forecasting by making seasonal product recommendations based on historical trends. They also give independent retailers access to the same buying network and inventory planning power as big department stores, allowing them to respond faster to changing consumer demand.
A lingerie and swimwear retailer we work with tapped these tools to easily reorder products and discover new ones. They were able to keep the right goods in stock and cut purchase order time by 50%.
Related: How Small Businesses Can Leverage AI Without Breaking the Bank
Busy retailers often compare covering shifts to a game of whack-a-mole… that never ends. Juggling employees, contractors and gig workers, especially during peak holiday periods, can be a full-time job.
The process tends to be old-school and manual, leaving bosses and employees equally frustrated with last-minute changes and hard-to-read spreadsheets. In fact, nearly half of small business owners spend about a full day a week on this kind of HR admin and related tasks.
Help is on the way in the form of AI-powered apps that automate and optimize scheduling. By tapping into historical and projected sales data, they help create more efficient and flexible schedules that stay on budget.
Plus, these apps make it easier on employees, automatically gathering info on availability and hours, and enabling workers to check in and out of shifts. For employers, new tools even integrate with existing point-of-sale systems, enabling retailers to automate scheduling and payroll.
For any retailer, strong customer service is a must. More than nine out of 10 consumers are more likely to make repeat purchases from a company that offers excellent service, while three-quarters feel like ditching a brand after just one poor experience.
But many retailers simply don’t have the money to hire a customer support team. When handling a single customer call costs $5 to $15 on average, that expense quickly adds up.
So increasingly, I see clients turning to AI to beef up their customer service. While early generations of “declarative” chatbots were limited to rigid scripts, the latest generative AI agents are far more flexible and, in some cases, earn better satisfaction scores than human reps.
By letting chatbots field rote questions about opening hours and return policies, retailers free up their team to focus on assisting customers with more complex issues. It also helps that most Gen Z consumers actually prefer self-service to a phone call!
Of course, some tasks shouldn’t be entrusted to AI or an automated tool. After all, the real edge that retailers have is the human element and their unique talent as product experts and curators.
I know that when I’m shopping for something that matters to me — new gear, the latest fashions, amazing art — I’ll actively seek out a human expert. I want a personal touch, not an algorithm. Ideally, retailers should use AI in ways that enable more interaction with customers and staff, and allow them to spend more time on thoughtful curation of merchandise.
But for retailers, AI and other tech tools can be a game-changer. In today’s challenging economy, the payoff goes well beyond savings. In addition to spending less time on admin and more time doing what they love, a retail entrepreneur can build a smarter, more efficient business that punches above its weight.
When you run a retail business, it’s easy to rack up big bills.
As just one example, it can cost upward of $20,000 to have a developer build a custom ecommerce website. For many of the retailers I work with, that price tag can be daunting, or even out of reach.
Financially, retailers are more squeezed than ever right now, with an average net profit margin of just 4.5%. Inflation, staffing issues and high fixed costs like rent all eat away at slim profits. The uncertainty around tariffs definitely isn’t helping, either.
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