The future of retail and AI in North America 

As North America’s retail sector races to meet the growing demand for personalized, efficient, and innovative customer experiences, AI is at the forefront, revolutionizing everything from customer engagement to supply chain management. With businesses leveraging AI to streamline operations and elevate service offerings, the retail landscape is evolving faster than ever—and the companies that embrace this transformation will lead the charge into the future of retail. 

AI driving retail growth  

Companies using AI for customer engagement and operational automation have seen improvements in profitability and growth. However, sourcing the right talent to implement these solutions effectively remains a significant challenge.  

At FDM, we’ve partnered with leading brands to provide the skilled professionals needed to bridge this gap. Our consultants are equipped to meet the unique demands of North American retailers and are trained to optimize AI-driven strategies for maximum impact.  

A recent survey that we conducted earlier this year revealed some interesting insights about the state of AI adoption and the main barriers to adoption for organizations.  

• 48% of organizations don’t have the specialist skills to maximize AI, highlighting a significant skills gap in the industry.  

• 64% of organizations are already using AI  

• Automation for operational efficiency and customer service are the top AI use cases for 61% of organizations.  

Customer service  

Retailers using AI have reported notable improvements in both sales and customer satisfaction. According to FDM Consultant Shriya Sriram, a Business Analyst (BA) for a luxury retail client, AI has the potential to transform the customer-facing side of retail. “AI can elevate the retail experience by offering personalized product recommendations and enabling faster, more convenient checkout processes,” Shriya explains. “It’s quite exciting to see how much our world will change in the upcoming years.” 

AI can analyse data from various touchpoints—physical stores, online platforms, and loyalty programs—to personalize customer interactions. For example, Sephora’s AI-driven tools, such as Colour IQ and Lip IQ, scan a customer’s face to offer tailored makeup recommendations like foundations and lipsticks. This not only enhances the customer experience but also drives sales. 

Similarly, AI-powered chatbots can improve customer interactions by handling product inquiries, order tracking, and basic troubleshooting, freeing up human resources for more complex tasks. However, Shriya notes that it’s essential for retailers to ensure chatbots are well-trained to provide accurate responses and avoid frustrating customers with irrelevant instructions. 

Beyond customer-facing applications, Shriya’s team is exploring innovative uses of AI internally. “We’re currently looking into auto-generated meeting minutes and translations into various languages,” she shares. “At an overall company level, we are actively incorporating other innovative solutions at various stages in the product lifecycle.” 

Operational efficiency  

AI has proven to enhance operational efficiency by automating tasks and optimizing processes. For example, autonomous AI systems can streamline inventory management, identify pricing errors, and support dynamic pricing strategies that respond to demand and competition.   

“In the retail industry, AI has the potential to transform every phase of the clothing lifecycle. It can help determine optimal inventory levels, ensuring effective stock management while minimizing shortages and excess. Additionally, AI can optimize delivery routes, reducing costs and ensuring timely deliveries.” Says Shriya.  

Looking ahead, Shriya shares her perspective – “I’m excited to see how AI technology progresses, especially in automating tedious tasks to improve efficiency while eliminating errors.” Shweta also highlights her company’s efforts in this area “Our team is currently exploring AI-driven inventory automation to enhance stock availability and facilitate store transfers aligned with sales growth in individual stores.”  

However, the FDM survey reveals a key challenge: 35% of organizations cite data security concerns as the top barrier to adopting AI. 

Mitigating fraud risks  

AI is also being used to enhance security and reduce fraud risks. AI-driven video analytics and smart cameras are deployed to monitor in-store activities and detect suspicious behaviour, minimizing risks of theft and fraudulent transactions.  

Supply chain optimization  

AI contributes to supply chain resilience by improving logistics and delivery times. It aids in demand forecasting and inventory optimization, ensuring that products are available when and where they are needed.  

Early adopters of AI-enabled supply chain management have reported reductions in logistics costs by 15 per cent and improvements in inventory levels by 35 per cent. By processing vast amounts of real-time data, AI enhances the accuracy of demand forecasting and optimizes production and inventory plans across various locations. Ryder’s analysis highlights that supply chain disruptions and material scarcity were significant challenges for retailers in 2024.  

Challenges and ethical considerations  

While AI unlocks significant value, retailers face challenges like upskilling their workforce, addressing data security concerns (35% according to our survey), and ensuring ethical AI usage, such as mitigating algorithmic biases 

FDM in retail  

FDM has launched thousands of tech careers across retail and FMCG around the world. We have partnered with the world’s largest brands for over 30 years, allowing retailers and FMCG companies to build diverse technical talent, utilizing our graduates, veterans and returners. 

Currently, 55 consultants are on assignments with retail clients globally, supporting and transforming their operations and achieving business goals. For instance, one of our prestigious retail clients successfully migrated their operations to Microsoft Dynamics 365 to improve financial reporting and integrate global systems.   

FDM Business Intelligence (BI) Developers and BAs facilitated data migration onto a new system, automated manual processes and created dashboards to standardize business processes, improving reporting and enabling management to monitor internal controls across business units.   

Similarly, for a luxury cosmetics client FDM’s IT Project Management Office Analysts have been involved in implementing state-of-the-art technologies and using sophisticated analytics and dynamic scenario planning to help unlock efficiencies and cost savings to drive business growth.     

FDM Skills Lab  

Emerging technologies and changing work practices mean companies have to focus less on clearly defined job roles and more on the capabilities of highly versatile professionals, who will add value to projects at pace when required.  

Our five specialist Practices – Software Engineering, Data & Analytics, Change & Transformation, IT Operations and Risk, Regulation & Compliance – include multiple interconnected pathways at our FDM Skills Labs, building a versatile and adaptable consultant workforce.  

FDM Skills Lab is a dedicated space designed for consultants to hone their practice-relevant abilities. It’s an immersive ecosystem for professional advancement, blending theory with hands-on experience in a dynamic environment to facilitate consultant development. Consultants acquire skills and develop experience within a diverse range of disciplines under a consulting area and can undertake several different roles when deployed on assignments.  

Within our Skills Lab, we’ve set up multiple pods focused on AI integration in business operations, enhanced by successful workshops. For example, a pod of six Java Developers and four Business Analysts tackled the challenge of building a Secure Instant Messaging App, mastering Scala in only two weeks to develop a scalable, real-time communication platform with group chat capabilities and robust security.   

Our consultants  

FDM Consultant Shweta Bhatia joined our Change & Transformation Practice before going on assignment as a BA with a luxury retail client. Her current role involves managing change requests in JIRA, BRD (Business Requirements Documents) preparation, coordination with vendors and UAT (User Acceptance Testing) testing.  

“I am proud to be a part of a huge software upgrade project onsite with the client. This has widened my knowledge of IT processes. FDM has given me a key advantage in my career and made me market-ready to take on current projects with the utmost confidence in myself. It has also shown me a future path to enhance my skills further.” 

Speaking of her FDM coaching she says –  

“Coaching in SQL query has helped me in my current assignment for UAT testing of sales postings, while the business analysis and ITIL certification have helped me understand the business needs and deliver IT solutions.” 

Shriya Sriram joined our Data & Analytics Practice before her assignment with a global retail client. In her current role as a BA, she is handling an end-to-end regression test project, where she has the chance to learn about backend flows and processes.  

“FDM provided me with an intensive refresher that facilitated a smooth transition from university to my current role, specifically in SQL and Microsoft Excel. In addition to technical skills, I also benefitted from the insight into corporate usage of email / Microsoft Teams communication. While it sounds very basic, communication plays a crucial role when working with people. One of the most valuable concepts I learned during my training was the SDLC (Software Development Lifecycle).  

Having a theoretical understanding of the SDLC before joining projects enabled me to grasp and navigate tasks more effectively from the start.” 

FDM can help solve a huge resourcing challenge for your tech team. Our consultants are upskilled in the latest industry-relevant tech to drive our client’s digital transformation journey – in roles such as e-commerce app development, automation, data engineering and more.  

Our talent solutions span multiple functions across the retail and FMCG sectors including:  

• Supply chain & logistics  

• Order management & fulfilment  

• Payments & processing  

• Store & eCommerce design  

• Customer loyalty & rewards  

• Sales, pricing & promotions  

Recruiting year-round, we offer the flexibility and agility to fill short-term skills gaps or a steady talent pipeline to meet long-term goals.  

Ready to elevate your retail operations? Contact us today to stay ahead in the digital transformation race. 

Contact us today!