Tis’ the (shorter holiday shopping) season.
It’s a digital race against time. This year’s holiday season is shorter than normal — just 26 days between Thanksgiving and Christmas Eve, or five fewer days — and retailers are scrambling to juggle seasonal spikes and consumer expectations while coping with ever-daunting supply chain disruptions and nagging inflation.
The contracted season has forced major U.S. retailers such as Amazon.com Inc., Walmart Inc. and Target Corp. to launch promotions sooner to capture early demand and drive sales before the traditional rush.
And it has prompted the industry to intensify its use of artificial intelligence (AI) automation to ease the crunch in what is expected to be a record year. The National Retail Federation’s winter holiday season forecasts sales of between $979.5 billion and $989 billion, up from $955.6 billion last year.
“The compressed season has forced many of us to come up with solutions for the supply chain,” Deborah Surrette, chief commercial officer at Veho, said in an interview. Veho is using AI analysis of shipment histories to deliver parcels faster to customers based on previous drop-off spots and recipients’ preferences, she said.
“The promise of AI looms large, bringing with it the potential to revolutionize store operations, drive efficiency and bolster the bottom line,” Everseen CEO Alan O’Herlihy said in an email. “When done right, AI delivers value by supporting a seamless process for self-checkout. Expert AI systems are achieving high accuracy rates and minimal false positives, so customers aren’t frustrated by interruptions during the checkout process. Systems are designed with simple prompts to enable customers to self-correct scanning errors quickly and easily.”
Retailers increasingly are mulling AI to process information based on weather and traffic disturbances. Precise demand forecasts are integral to automated scheduling, says Michael Spataro, chief customer officer at Legion Technologies. He said some retailers use AI to generate schedules that automatically account for employee preferences, expected demand and additional staffing needs, such as scheduling someone skilled in backstock and inventory management on delivery days.
Retailers are among the more-adventuresome adopters of GenAI as a way to reach customers with more sophisticated and targeted deals more quickly. In a survey of 50 retailers, McKinsey discovered 82% tested GenAI for customer service and 64% conducted pilots with GenAI to improve internal value chains. Some 58% of customers polled by Adobe Inc. said GenAI improved their shopping experience.
At the same time, younger generations (18-34) more frequently turn to TikTok and social media ads for gift ideas, according to a SurveyMonkey poll.
The sheer amount of data and an increasingly complex global supply chain has raised the stakes on what companies face, and how AI can help them navigate both factors.
“As we look to the future, the integration of physical robotics with AI, and an event mesh with agentic AI, presents exciting possibilities,” Ush Shukla, distinguished engineer at Solace, said in an email. “Just as automated guided vehicles have revolutionized warehouses, similar technologies could transform the in-store experience, from restocking shelves to assisting customers.”
An event mesh approach offers a flexible, responsive retail ecosystem that adapts to changing market conditions, customer preferences and technological advancements, he added. That, in turn, leads to real-time decision-making and enhanced personalization across an organization.
“A seamless retail experience must cross the whole business: Employees, suppliers and customers,” Shukla said. “An event mesh, powered by agentic AI, is uniquely positioned to address the pressures associated with the retail holiday season. By creating a unified, real-time data network, it enhances supply chain visibility and agility, enabling quick responses to disruptions.”
Store leaders are overwhelmed with more than 50,000 data points each week, yet without the right guidance the potential for lost revenue escalates. Quorso calculated 13% to 18% of in-store promotions are not executed effectively, impacting billions of dollars in sales during November and December.
Quorso, a digital platform for eight of the world’s top 25 retailers that manages about $200 billion in sales at thousands of stores, translates retail data into clear, actionable priorities. It drills down on accurate promotion tagging, stock replenishment and adherence to planogram, visual representations of a store’s products or services on display.
“Tapping into AI and automation can help software development teams identify bugs and issues, making it easier to detect critical mobile failures and fully optimize customer experiences,” Mav Turner, chief product and strategy officer at Tricentis, said in an email. “AI is a testing accelerator, making it easier and faster to give a real-time snapshot of inventory. This rapid deployment is important in the fast-paced retail world, especially as consumers look to get their holiday shopping done efficiently.”
Of course, earlier promotions highlight the importance of having the right quantity of products at a fair price based on timely, accurate data to meet demand.
Underlying systems architecture increasingly are dependent on advanced warehousing automation to meet surging e-commerce demand by consumers, improve operational efficiency and maximize profitability, said Curt Avallone, co-CEO of Fabric, an automated fulfillment solution that uses robotics.
In October, Fabric partnered with Save A Lot, an affordable grocery chain, to launch such a model out of Brooklyn, assembling 50-item orders in just six to eight minutes and delivered to customers within an eight-mile radius.
Adds Kelly Goetsch, chief strategy officer at Commercetools: “Businesses should first bring in extensive automation to avoid downtime. Auto-scaling should be employed at all levels to avoid mistakes while provisioning hardware and software. Second, change management, especially for custom code, software and hardware upgrades, new network gear, should also be implemented to avoid outages. Third, caching should be done liberally, especially considering that a 10x, 100x or even 1,000x spike in traffic can often be served if common handful pages driving traffic are served directly by your Content Delivery Network. Testing should also occur in various locations including a developer’s local environment, an integration environment and production, and health checks should be automated and as in-depth as possible.”
It all makes for a fascinating experiment as companies scramble to deliver more goods to more people in a shorter period of time, but one that is attainable, one e-commerce expert asserts.
“I don’t see compressed holiday timeframes as being an issue for stores moving forward,” said Greg Zakowicz of Omnisend. “Instead, retailers will be left dealing with factors like consumer confidence in the economy and how to balance early and steep discounts while maximizing profit margins.”
