Retail

Retail leaders are navigating a whirlwind of challenges—everything from changing consumer habits and supply chain disruptions to fierce competition for customer wallets. On top of that, there’s a growing push for personalized shopping experiences and sustainability. But the good news is that by tapping into the power of technologies like AI, IoT and big data analytics, retailers can turn these obstacles into opportunities.

5 top business concerns for retail leaders

Retailers today face a myriad of challenges that can impact their profitability and growth, including:

1. Updating and improving retail processes

Updating and improving retail processes to enhance operational efficiencies and create new sources of revenue. Leaders aim to mitigate the impact of rising operational expenses on financial statements by discovering innovative methods to generate additional income.

2. Seeking creative approaches

Updating and improving retail processes to enhance operational efficiencies and create new sources of revenue. Leaders aim to mitigate the impact of rising operational expenses on financial statements by discovering innovative methods to generate additional income.

3. Enhancing supply chain operations

Updating and improving retail processes to enhance operational efficiencies and create new sources of revenue. Leaders aim to mitigate the impact of rising operational expenses on financial statements by discovering innovative methods to generate additional income.

4. Safeguarding customer data

Updating and improving retail processes to enhance operational efficiencies and create new sources of revenue. Leaders aim to mitigate the impact of rising operational expenses on financial statements by discovering innovative methods to generate additional income.

5. Boosting business productivity

Updating and improving retail processes to enhance operational efficiencies and create new sources of revenue. Leaders aim to mitigate the impact of rising operational expenses on financial statements by discovering innovative methods to generate additional income.

Unlock the power of AI in retail

By tapping into AI’s nearly limitless potential, retailers can transform challenges into opportunities—driving new levels of innovation and efficiency across their operations.
Personalized shopping experiences
Streamlined supply chains
Cost reduction and efficiency
Personalized shopping experiences
Streamlined supply chains
Cost reduction and efficiency

Personalized shopping experiences

AI helps retailers enhance customer experiences by offering personalized recommendations and identifying trends to create a more tailored shopping experience. 
Personalized shopping experiences
Streamlined supply chains
Cost reduction and efficiency

Streamlined supply chains

AI algorithms and AI-driven analytics  optimize demand forecasts, improving supplier relationships and building a more efficient supply chain.
Personalized shopping experiences
Streamlined supply chains
Cost reduction and efficiency

Cost reduction and efficiency

Automating repetitive tasks processes such as data entry and using AI-powered chatbots for customer service inquiries. significantly lowers labor costs and frees staff to focus on more critical tasks. 

Security

Maintaining data integrity in such vast and complex environments is critical, especially as data volumes grow and more applications become dependent on real-time data analysis. Data corruption or loss can have severe repercussions, affecting customer trust and business operations.

Load balancing

Hyperscalers often grapple with the issue of load balancing, which is the process of evenly spreading out the computational workload among servers. This is vital to keep the system running smoothly and to avoid overburdening any single server, which could slow down the entire system.

Scaling and reliability

As customer data demands evolve and AI applications become more prevalent, hyperscalers are constantly met with the challenge of scaling their data center capabilities to meet new demands. Additionally, any downtime in these data centers can result in the loss of millions for the hyperscaler and its end customers. Ensuring your network is resilient and reliable requires investment in current technologies. 

Statistics

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AI services in the retail sector are predicted to increase from $5 billion to above $31 billion by 20285.

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69% of retailers report an increase in annual revenue attributed to AI adoption6.

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72% of retailers using AI experienced a decrease in operating costs6.

Enhancing the retail customer experience

A large retail company with an expansive physical footprint and online marketplace faces challenges with customer retention, inventory management and market competition. The retailer decides to implement AI at various touchpoints throughout their infrastructure to improve customer experience and optimize other areas of the business. 
AI systems combine data from customer interactions to analyze purchase history, browsing behavior and customer feedback. The 360-degree data-driven customer profile is used to create a tailored experience tied to the customer’s shopping preferences, allowing the retailer to send recommendations that resonate with customers.
Gen AI can further enhance the in-store experience by transferring customer data to AI-powered kiosks. These kiosks can perform tasks such as giving product information, serving instant promotions, or allowing a customer to try on clothes that match their shopping patterns and preferences.
AI chatbots can assist customers with queries and troubleshooting in real time, improving the efficiency and quality of customer service. For example, AI can assist a customer with product usage and assembly rather than waiting for availability with a human agent.
AI forecasts demand based on seasonality, trends and events. Due to software that allows customers to view in-store inventories, the AI forecasts can help prevent stock-outs, ensuring accuracy between store, smartphone application and warehouse inventory levels.
Gen AI, when used alongside a retailer's extensive databases of customer behavior, can identify missing data that would enhance their customer profiles. By gathering these additional data points, feeding them into the model and refining it incrementally, the customer models can be progressively improved.
By leveraging AI and Gen AI, the retailer addresses its specific business challenges and significantly improves the customer experience. This leads to increased customer loyalty, operational efficiency and a competitive edge in the retail market. 

AI-optimized solutions for enhanced customer experiences

Technologies working in tandem can further enhance customer experiences by integrating AI-driven insights with other advanced tools such as edge computing, cybersecurity, high-speed connectivity and managed and professional services—creating a seamless and personalized shopping journey for your customers.
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Edge solutions integrated with AI
Edge solutions integrated with AI can enhance retail operations and customer experiences by reducing the latency required to transfer data between customer interactions and retail environments. Real-time data processing software requires faster speeds to offer personalized promotions and recommendations as customers shop.
2
AI-backed cybersecurity
AI-backed cybersecurity technologies can protect sensitive customer data from data breaches by quickly identifying fraudulent activity and blocking bad actors from gaining access to your systems. These tools can help maintain a safe and smooth shopping experience, while building trust and confidence from the customer with the retailers.
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Modernized networks
Modernized networks can help retailers improve their large language models through the efficient transfer of large data sets from a collection of stores, warehouses and other data collection facilities. High data transfer speeds support the model’s ability to improve and find new innovative ways to support your customers.
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Managed and professional services
Managed and professional services help retail companies implement AI by providing expert guidance and support. They identify impactful applications like personalized experiences and inventory management, deliver seamless integration, offer staff training, and provide ongoing maintenance. This approach enhances operational efficiency and helps drive business growth.

AI’s impact across the enterprise

AI is revolutionizing operations, driving efficiency and fostering innovation in numerous ways across the enterprise. Here are some additional areas where AI is making a profound impact:
Fraud detection and prevention
AI can enhance fraud detection and prevention in the retail sector. For example, AI algorithms can learn to identify patterns in transaction data that suggest fraudulent return activities. This helps retailers quickly spot and address suspicious return behaviors.
Inventory management
AI-powered systems can optimize inventory levels, forecast demand, and automatically reorder stock when needed.
Customer service
AI can provide personalized customer service and increase customer engagement. AI-powered virtual assistants can provide 24/7 customer service, answering queries and providing information instantly.
Store design
AI can optimize store layouts and staff schedules, improving operational efficiency and customer service.
Keep reading to discover how our capabilities can assist retailers in fully leveraging the benefits of AI. 

Building the Foundation for AI Success in Retail

You’ve seen how AI can transform your retail   business by enhancing productivity, bolstering security, enriching shopper experiences and setting your omnichannel ecosystem apart from the competition. But without the right infrastructure, your AI strategy won’t succeed. 
  • Reliable networking is key for transferring data (shoppers, transactions, products, logistics, etc.) to and from the cloud or datacenter.
  • Robust cybersecurity is essential to safeguard all this valuable data and AI infrastructure from evolving threats.
  • Low latency is vital for obtaining real-time insights from AI-powered systems to optimize your operations.
  • Expert guidance is needed to ensure your infrastructure can support your AI initiatives and keep them running smoothly.

Networking

Delivering seamless shopping experiences

AI systems in retail need to handle vast data volumes and ensure fast, seamless high-speed data transmission. Without robust networking infrastructure, these systems can struggle with latency and bandwidth issues, leading to delays in processing and slower decision-making. This can result in missed opportunities and a frustrating shopping experience with slow website load times, delayed transactions processing and less personalized service. Ultimately, this can erode customer satisfaction and loyalty, impacting your bottom line.

Why you need an AI-ready network infrastructure

As retailers expand their digital presence and integrate AI-driven tools to analyze shoppers’ purchase history and feedback and provide highly personalized suggestions, the demand for high-speed, low-latency networks grows. Investing in advanced networking infrastructure today means future-proofing operations, ensuring AI applications can scale and evolve without disruption. Reliable, instantly scalable networking solutions minimize latency and provide the bandwidth AI systems need for optimal performance, enhancing operational efficiency and driving customer satisfaction while boosting the bottom line.
Without a reliable network, chatbots may take several seconds or even minutes to respond to their initial messages, causing frustration among customers leading to a poor customer experience, decreased satisfaction, and potential loss of business. Inconsistent network connectivity can also result in incomplete or lost conversations, making it difficult to provide effective customer support.
Imagine shoppers trying to use your AI-powered chatbot to resolve an urgent issue with their online orders, and the network is slow due to insufficient bandwidth. The chatbot takes several seconds or even minutes to respond to their initial messages, causing frustration. Each interaction is delayed, making the conversation feel disjointed and inefficient. Delays in receiving confirmation emails or tracking information leave you uncertain about the status of your issue. This slow network not only hampers the efficiency of the chatbot but also negatively impacts your overall experience, leading to frustration and a lack of trust in the service.

How network solutions enable AI

From personalized shopper service to efficient inventory sourcing, it’s clear that AI is revolutionizing retail. Investing in cutting-edge networking technologies is the key to unlocking the full potential of AI, transforming your business and setting new standards in the industry.
Robust networking infrastructure is the backbone that supports AI-driven innovations, enabling seamless and personalized shopper experiences over all channels. Flexible, scalable network solutions empower AI systems to control retail transactions, shopper data and network traffic efficiently, ensuring high-bandwidth cloud connectivity anytime without disrupting regular business operations.
With reliable and high-speed connectivity, AI can analyze vast amounts of data from customers, transactions, and products in real-time, driving smarter decision-making and more efficient operations. From enhancing shopper experiences through personalized omnichannel ecosystems or to optimizing inventory management. This synergy between AI and advanced networking solutions ensures that retailers stay ahead of the curve, offering unparalleled personalized service and operational excellence. 

Cybersecurity

Delivering seamless and secure shopping experiences

AI systems in retail handle a wealth of sensitive data, making them targets for unauthorized access, model manipulations and cyberthreats. The increasing sophistication of AI also brings more complex security challenges.  Robust cybersecurity standards are essential to protect data integrity, confidentiality and operational availability. 
Dealing with higher volumes of data without proper cybersecurity measures, retailers risk data breaches that can expose sensitive customer information, leading to identity theft and financial fraud. This damages the retailer’s reputation and erodes customer trust. Shoppers may experience disruptions in service, such as website outages or compromised transaction security, resulting in a frustrating and unsafe shopping experience. Ultimately, inadequate cybersecurity can lead to vulnerabilities in the AI strategy, significant financial losses, legal repercussions and a tarnished brand image.

Why cybersecurity is critical for AI

Despite their many benefits, AI-powered tools can introduce new vulnerabilities when organizations implement them. As AI systems become integral to operations—ranging from smart inventory management to direct customer interactions and personalized shopping experiences, the stakes for security rise exponentially. Retailers must ensure that their AI-driven processes and data, whether at rest or in transit, are shielded from unauthorized access, model manipulations and cyberthreats. This not only protects sensitive customer and organizational data but also strengthens the trust that shoppers place in your brand.  
Without robust cybersecurity measures, customer data could be at risk of breaches and unauthorized access, leading to loss of customer trust, legal penalties, and financial losses due to data theft or fraud.
Cyberattacks or disruptions can also considerably impact the organization, cause downtime and harm shopper experiences, personalized omnichannel ecosystems or smart inventory management. By investing in strong cybersecurity measures, retailers can confidently leverage AI technologies to drive innovation, efficiency and a superior shopping experience—ultimately gaining a competitive edge in the market.

How cybersecurity solutions enable AI

AI-powered cybersecurity solutions are essential for protecting data and systems from sophisticated threats. They ensure the safe and effective operation of advanced AI technologies that help retailers provide personalized customer service, secure omnichannel ecosystems and optimized inventories. Safeguarding sensitive data and AI systems from unauthorized access, model manipulations and cyberthreats such as denial-of-service attacks or malware is critical for maintaining data integrity, confidentiality and availability. 
AI’s reliance on vast amounts of data makes it particularly vulnerable to cyberthreats. If threat actors inject false information into these systems, it can drastically alter the behavior of AI, leading to misguided decisions. For retailers, this could mean incorrect inventory predictions, flawed customer insights and a negative impact on the bottom line. 
Robust cybersecurity measures ensure AI systems operate on accurate and reliable data and help make informed decisions that drive success and customer satisfaction. Comprehensive cybersecurity solutions ensure the smooth functioning of AI systems, which helps build trust and confidence among shoppers, retail leaders and stakeholders.

Conclusion

By ensuring the safe and effective operation of advanced AI technologies, robust cybersecurity measures are critical for retail organizations. They protect sensitive data against complex threats, minimize downtime and enhance customer experience, helping build trust and confidence among retail leaders and stakeholders.

Edge Fabric

Problem to solve

As AI initiatives take off, the influx of data requires an infrastructure strategy for secure connectivity, storage, access, and transmission of that data for real-time processing and decision making. Traditional networks and infrastructure simply can’t keep up with the demand. AI systems in the retail industry require minimal latency and real-time, local processing for tasks such as personalized shopping experiences, smart warehouse management and real-time promotions. Without these capabilities, delays and inefficiencies can prevent AI systems, from delivering optimal performance and shopper satisfaction as data would bottleneck as it attempted to move across a disperse network to a data center and back again.
This can result in slower response times for personalized recommendations, leading to a less engaging shopping experience. Smart warehouse management systems may face delays in processing and updating inventory, causing stockouts or overstock situations. Real-time promotions might not reach customers at the right moment, reducing their effectiveness. For end customers, this means a less responsive and satisfying shopping experience, ultimately impacting customer loyalty and sales.

Why edge fabric solutions are critical for AI

By ensuring minimal latency and real-time processing, Edge fabric solutions enable advanced AI technologies to operate efficiently and meet user expectations, which leads to trust and confidence among shoppers, retail leaders and other stakeholders. Edge fabric solutions also help strengthen security posture and compliance by enhancing data sovereignty and containing the security footprint.
Without an edge fabric, the chatbot may not be able to process data efficiently at the edge of the network. This could result in higher latency, reduced performance, and an inability to handle real-time interactions effectively.
Fabric infrastructure empowers retailers to harness the full potential of AI, transforming their operations with unparalleled precision and agility. This infrastructure supports seamless integration of AI-driven insights into daily workflows, enabling personalized customer experiences, optimized inventory management, and adjusts forecasts in real time, considering external factors like weather or local events. Retailers can leverage these capabilities to stay ahead of the competition, drive innovation, and deliver exceptional value to their customers. With edge fabric infrastructure, the possibilities for AI in retail are limitless, paving the way for a smarter, more responsive and customer-centric retail environment.

How edge fabric enables AI

For organizations seeking a flexible digital infrastructure with low latency, speed and security, a network connectivity fabric can be customized to leverage existing lit fiber network, expand new routes to connect to the datacenter and consumed or reconfigured on demand as data demands increase.
Imagine a scenario where inventory management systems can instantly analyze stock levels and predict demand, ensuring shelves are always stocked with the right products. Or consider an algorithm that gathers data from smart devices to analyze purchase history, browsing behavior, and customer feedback virtual assistants and chatbots to provide real-time, accurate responses to customer inquiries.
Edge fabric solutions enhance AI application performance by allocating computing resources near data sources to keep data local, reducing latency, streamlining cloud connectivity and increasing processing speeds. This is essential for real-time analysis and decision-making in inventory management, sourcing and virtual/chatbots and other cases where immediacy is critical.

Conclusion

Edge fabric solutions are essential for retail organizations to fully harness the power of AI. They ensure efficient and effective operation of AI technologies, enhancing customer experience, optimizing inventory management, and building trust among retail leaders and stakeholders.

Managed & Professional Services

Problem to solve

Navigating the right infrastructure for AI systems in retail can be tricky. Without expert guidance and support about the AI-required infrastructure, these systems may not perform at their best, or be integrated into operations, leading to inefficiencies, increased costs and suboptimal performance.
They may also struggle with slow processing times and delayed decision-making. This impacts everything from personalized customer recommendations to real-time pricing adjustments, ultimately impacting the customer experience. Shoppers might encounter app issues, irrelevant product suggestions or inconsistent pricing, all of which can erode trust and loyalty. In the competitive retail world, these issues can have a ripple effect, hurting your brand’s reputation and driving customers to seek more reliable alternatives.

Why managed and professional services are critical for AI

For retailers on the AI transformation journey, expert guidance is key. It ensures provides tailored assessments to ensure AI systems are correctly deployed and seamlessly integrated into operations. These services are the backbone that keeps AI technologies running efficiently and effectively. 
Managed services provide continuous monitoring and maintenance, preventing downtime and ensuring that AI systems are always up to date with the latest advancements. Professional services, on the other hand, offer specialized expertise to tackle complex challenges, from data integration to system optimization. With these services, retailers can benefit from everything AI has to offer, including personalized shopper service and smart demand forecast, among other benefits.

How managed and professional services enable AI

A team of experts can provide tailored assessments to guide the retail organization during deployment and ensure the infrastructure aligns with the retailer’s needs. By leveraging managed and professional services, retailers can establish a robust and scalable infrastructure that supports their AI initiatives. These services ensure that the necessary hardware, software, and network components are in place, optimized for the unique demands of AI applications.
Once in operation, experts manage the network, edge fabric and cybersecurity tools to ensure AI systems are running efficiently, maximizing performance and uptime and allowing internal resources to focus on core business projects and now AI-powered processes such as smart inventory management. This comprehensive support not only enhances the reliability and security of AI systems but also empowers retailers to innovate and stay competitive in a rapidly evolving market.

Conclusion

Managed and professional services are crucial for retail organizations to fully leverage the potential of AI. They provide customized assessments to streamline the deployment and integration of AI systems. Additionally, they offer around-the-clock management to ensure that the infrastructure enables AI systems to provide personalized shopper experiences and efficient inventory sourcing.
Keep reading to find out how Lumen can serve your retail organization in its AI transformation journey. By leveraging robust networking, edge fabric and cybersecurity solutions, we can empower your AI systems to provide seamless and secure shopping experiences, optimized inventory management, and personalized customer service, driving innovation and operational excellence in your retail business.

Our expertise at a glance

As a trailblazer in global networking for retailers, Lumen is your strategic ally in the AI era. We can deliver AI-ready infrastructure with broad coverage and unique fiber network routes, providing capacity and flexibility to meet your dynamic retail demands. Our forward-thinking solutions span network, cybersecurity and Edge Fabric suites, supported by a team of experts to optimize your network performance and security. 

Reliable network for retailers  

  • Expertise: Leverage Lumen knowledge and experience in AI and load balancing to optimize your retail environment.
  • Seamless integration: Enable smooth integration of AI tools with existing retail infrastructure.
  • Scalability: Get scalable solutions that grow with your retail needs, helping your network handle increasing demands.

Robust cybersecurity measures for retailers  

  • Specialization: Leverage our expert knowledge in AI and cybersecurity tailored specifically for retail environments.
  • Seamless integration: Enable smooth integration of AI-driven cybersecurity tools with existing retail infrastructure.
  • Enhanced support: Take advantage of dedicated support and resources to address unique security challenges faced by retailers.

Edge fabric for retailers

  • Minimal latency and real-time processing: Enable efficient data transfer and processing to meet the high demands of retail environments and customer expectations.
  • Scalability and flexibility: Support the growth of AI and data-intensive applications with scalable solutions tailored for retailers.
  • Enhanced performance and cost savings: Optimize data flow and minimize operational expenses in large-scale deployments.
  • Compliance and security: Enhance data sovereignty and provide robust security measures to meet stringent retail operational requirements.

AI-ready infrastructure solutions

Networking Solutions
Unleash your business potential with networking solutions that enable inteligent automation, real-time performance data and dynamic bandwidth scalability.
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Security Solutions
Secure your digital environments and maximize productivity with award-winning cyber defense built for today's digital security landscape.
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Edge Private Cloud
Fully managed, pre-built infrastructure for high-performance private computing connected to our global fiber network.
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Managed & Professional Services
Proven technology expertise and results you can trust.
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Why Lumen

By partnering with Lumen, you can ensure that your AI initiatives are built on a solid foundation, enabling you to unlock new growth opportunities and stay competitive in a rapidly evolving digital landscape.

SEE WHY
5World Economic Forum, Here's how artificial intelligence can benefit the retail sector, January. 2023.
6Nvidia, State of AI in Retail and CPG, January 2024.