This week, thousands of professionals will gather at the National Retail Federation (NRF) 2025: Retail’s Big Show, for insights into the changing retail landscape. Top of mind for many attendees is how AI will impact the retail industry. What retail-specific AI innovation is on the horizon, and can those solutions solve the myriad of challenges retailers face, from improving customer experiences to meeting customer demand on time? 

To help answer these questions, Microsoft leaders and industry partners will be on hand to showcase the very latest AI innovation for retailers—including how agents can open doors to unprecedented customer experiences, help meet customer demand on time, and drive ethical sourcing and sustainability.   

Microsoft Dynamics 365

Learn more about the Dynamics 365 AI-powered ERP solutions.

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AI and agents will transform retail in 2025 

In 2025, the retail industry will be shaped by three transformative trends that will set the pace of growth and success in the evolving retail landscape:  

• delivering hyper-personalized customer experiences across physical and digital channels.

• redefining convenience through innovative fulfillment and flexible shopping options.

• embedding sustainability and ethical sourcing at the heart of business strategies.

At the Microsoft expo booth and our featured session, NRF attendees will learn how organizations can achieve these priorities by infusing AI across every business process and workflow—within both customer-facing and backend operations. 

By integrating AI solutions like Microsoft Copilot and agents within ERP systems—the traditional foundation for managing critical business processes—retailers can scale the delivery of personalized customer experiences and flexible shopping options. 

In addition, Microsoft will demonstrate at NRF how agents in Dynamics 365 ERP system solutions autonomously manage workflows and orchestrate processes across various domains, including customer journey, procurement, service and operations. These agents make data-driven decisions, optimize operations in real-time, and enhance productivity by automating routine tasks. This allows employees to concentrate on strategic priorities, thereby improving efficiency, cost savings, and relationships with customers and suppliers.  

Delivering better customer experience

Dynamics 365 delivers AI capabilities that enable retailers to hyper-personalize customer experiences across physical and digital channels.  

Transforming the shopper’s journey

With Dynamics 365, retailers can analyze vast amounts of customer data to better understand customer preferences and behaviors. This will enable them to deliver personalized shopping experience. Based on a 2025 CIO and Technology Executive survey by Gartner®, there will be an increase of retail respondents by 67% in 2025 to invest in in-store generative AI technology for associates and an increase of 60% to invest in in-store generative AI technology for customers.¹ 

Retailers like Venchi are piloting the Personalized Shopping Agent in Dynamics 365 to enable their in-store associates to quickly surface product recommendations based on the customer’s preferences at checkout. With instant, tailored suggestions, it could not only enhance the overall shopping experience but also increase the basket value while improving brand loyalty. 

Seamless omnichannel experience

Today’s customers expect a seamless shopping experience across all channels. Dynamics 365 AI-powered ERP systems integrate inventory and customer data from physical stores, online platforms, and mobile apps into a unified system. This integration ensures that customers receive consistent service and accurate information, regardless of how they choose to shop.

Lighting retailer Visual Comfort & Co. created a unified platform across 53 showrooms, a robust online store, manufacturing, and shipping with Dynamics 365 ERP system solutions; helping them to streamline operations and improve visibility across the complex supply chain. With real-time inventory visibility, their showroom associates can promise order availability and delivery accurately.

Turning fulfilment into a competitive advantage

With agents and Dynamics 365, retailers can redefine convenience through innovative fulfillment and flexible shopping options.  

Proactively mitigate supply chain disruptions

It is paramount for retailers to prevent stock out and ensure on-time delivery to their customers to improve retention and loyalty. With frequent supply chain disruptions globally, retailers need to constantly stay in touch with their suppliers or contract manufacturers to proactively identify delays. The Supplier Communications Agent in Dynamics 365 autonomously processes supplier confirmations, flags potential delays, and suggests corrective actions to help ensure that customer orders are delivered on time.  

With the agent automating these critical tasks, supply chain teams can focus on improving supplier relationships and contract negotiations resulting in reduced costs and more efficient procurement processes. 

Flexible and fast fulfilment

Retailers like Build-A-Bear use Dynamics 365 to optimize fulfillment and offer a seamless shopping experience. They use stores as mini warehouses to fulfil orders faster, and with enhanced inventory visibility they can help ensure that their products are available when and where customers need them. They are able to offer flexible shopping options like Buy Online, Pick Up In Store (BOPIS) and Buy Online, Ship From Store (BOSFS) to their customers for more convenience. Additionally, the implementation of Dynamics 365 has led to a 28% reduction in processing days, significantly boosting warehouse productivity and enabling faster order fulfillment. These innovations allow Build-A-Bear to meet the evolving needs of today’s consumers, providing a more efficient, reliable, and flexible shopping experience. 

Ethical sourcing and sustainability 

In 2025, retailers are increasingly committed to embedding sustainability and ethical sourcing at the heart of business strategies. Sustainability features in Dynamics 365 solutions can help retailers comply with the latest standards and best practices, as well as drive positive changes for the business and the environment.

Enable recommerce and drive sustainable practices

AI-powered Dynamics 365 ERP systems help retailers to monitor and implement sustainable practices such as circularity. This enables them to run take-back programs for reselling, reusing, or recycling products to extend their lifecycle and reduce waste. Additionally, the order orchestration engine in Dynamics 365 helps retailers like ONLY, one of BESTSELLER’s largest fashion brands, to support sustainability goals by choosing fulfillment options that minimize carbon emissions while also helping to ensure orders are delivered on time and profitably. Along with the ability to buy online and return in-store, ONLY customers have the most environmentally friendly shipping options available.  

Ethical supplier management

AI capabilities in Dynamics 365 ERP systems can help enhance ethical sourcing by managing vendor compliance, enforcing procurement policies, and supporting multisource strategies. One of our partners, Columbus, implemented Dynamics 365 ERP solutions at their customer Devold of Norway to help them deliver premium quality woolen products to their consumers. They now have a modernized cloud platform and are looking for ways to further improve traceability of their products so that their consumers know where the products come from. These solutions offer transparency and traceability for product origins and provides sustainability reporting to monitor and improve practices—ensuring your procurement aligns with ethical standards. 

Future-proof your retail operations in 2025 

AI-powered solutions for ERP and service systems are more than a technological upgrade. They are a strategic imperative for retailers aiming to deliver exceptional customer experiences, build lasting brand loyalty, and achieve sustainable profitability. In today’s business landscape, you need autonomous systems that can anticipate market changes, customer needs, or operational risks. The risk of clinging to legacy systems extends beyond inefficiency. It leads to missed opportunities, slower time-to-market, and the inability to remain competitive. Companies using AI-first processes through AI-powered solutions for ERP systems gain the foresight and agility necessary to not just react to changes but to lead through them.  

Join us at NRF ‘25 

If you are registered for NRF, we invite you to visit the Microsoft booth (#4503) and join Kathleen Mitford, Microsoft’s Corporate Vice President, Global Industry Marketing, as well as leaders at Bath & Body Works, Venchi and Sitecore as they share their perspectives on transforming the shopper journey with AI. The session will take place on Monday, January 13, 2025 at 11AM EST.

Also, continue to visit the Dynamics 365 blog to learn more about how Dynamics 365 and Microsoft Power Platform are helping retailers reimagine the road ahead; and feel free to contact us to learn more about the Dynamics 365 AI-powered ERP system solutions. 

Source

¹Gartner, 2025 CIO Agenda: Top Priorities and Technology Plans for Retail, 16 September 2024 By Kelsie Marian, Sandeep Unni. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. 

The post The future of retail with Dynamics 365 AI-powered ERP solutions appeared first on Microsoft Dynamics 365 Blog.

Discover how Copilot for Dynamics 365 Commerce can help you deliver personalized customer experiences, optimize product management, and streamline retail operations for store associates, managers, and back-office staff with AI.

Transformative AI in Dynamics 365 Commerce

The retail industry is facing significant challenges and opportunities in today’s digital world. AI can help you create value for your customers and stand out from your competitors. It can help you solve critical challenges such as improving customer service, refining product management, increasing store associate productivity, and simplifying finances.

Dynamics 365 Commerce now includes Copilot, which helps you improve customer satisfaction, boost sales, increase profit margins, and enhance workforce productivity with automated insights, validations, and summaries that reduce the clicks and searches needed to find information, creating a near “one-click” retail experience.

Watch this brief video to see Copilot in action.

Customer insights

Copilot simplifies the process of understanding your customers. It aggregates data on customer preferences from Dynamics 365 Commerce, giving you an in-depth and comprehensive view of your customers, such as their favorite product categories, preferred price ranges, and lifetime value based on recency, frequency, and monetary metrics. You can view their previous interactions with a quick glance, making it easier to resume conversations or give customized follow-ups for better customer relationships and more personalized and effective engagement. Learn more about Copilot customer insights.

Product insights

Whether you’re introducing new products or welcoming new store employees, keeping everyone informed and prepared is essential. Copilot provides comprehensive product insights, including clear and concise descriptions, key benefits, inventory levels, and discount details, empowering your staff to elevate product sales. Additionally, employees can access information on related items like accessories and bundles, promoting a cross-selling environment that enhances the shopping experience and boosts sales. By equipping store employees with the knowledge and confidence to engage customers effectively, Copilot turns interactions into opportunities, increasing customer satisfaction, sales, and the all-important average order value.

Report insights

Envision a scenario where synthesizing insights to assess the performance of your retail channels becomes seamless. With Copilot, it’s easy. Copilot provides instant insights, generating narrative summaries for channel reports. You’ll receive a precise and succinct overview of critical metrics such as sales, revenue, profit, margin, and overall store performance—right at your fingertips. Copilot’s real-time analysis keeps you ahead, updating summaries as new data arrives, empowering your store associates to communicate results effectively, accurately, instantly. Embrace the future of retail intelligence with Copilot and revolutionize the way you interact with your data. Learn more about Copilot report insights in Dynamics 365 Commerce.

Retail statement insights

Copilot can summarize posted and unposted retail statements, highlighting key insights such as the number of affected transactions, total sales amount, and risks like returns without receipts, expense transactions, and price overrides. These insights into retail statements allow for straightforward and efficient management of financial reports and help you detect and correct discrepancies and risks in your retail statements by providing a clear summary of anomalies in transactional activity. By using Copilot-powered insights, you can identify issues without wading through numerous forms, promptly take corrective measures, and reduce the need for support inquiries to solve problems. Learn more about Copilot retail statement insights in Dynamics 365 Commerce.

Merchandise more efficiently

Merchandising is a complex and time-consuming process that involves configuring products, categories, catalogs, and attributes for each channel. Merchandisers need to ensure that their products are displayed correctly and accurately on the online store, and that they comply with each channel’s business rules and policies. However, manual configuration is prone to human error, and it doesn’t scale for businesses that have millions of products, thousands of attributes, and hundreds of categories and catalogs across hundreds of stores.

Copilot enhances merchandiser efficiency by streamlining merchandising workflows, summarizing product settings, and automating data validation by checking for errors and inconsistencies in your product merchandising data. From the Copilot summaries, you can navigate to a list of issues and act without losing context to address problems promptly and efficiently. Your products are always correctly configured and displayed, enhancing customer satisfaction and boosting sales. Learn more about Copilot merchandising insights in Dynamics 365 Commerce.

Ensuring the ethical use of AI technology 

Microsoft is committed to the ethical deployment of AI technologies. Through our Responsible AI practices, we ensure that all AI-powered features in Dynamics 365 adhere to stringent data privacy laws and ethical AI usage standards, promoting transparency, fairness, and accountability. 

Conclusion

Copilot features for Dynamics 365 Commerce are revolutionizing the retail experience by bringing AI to store associates, store managers, channel managers in the back office, and merchandisers. They’re simplifying complex data analysis, personalizing customer service, optimizing product management, and driving business growth by improving customer loyalty, increasing sales, and enhancing profitability.

If you’re ready to take your retail business to the next level, contact us today to learn more about how Copilot can help you transform your retail business.

Copilot functionalities in Store Commerce are available starting with the following versions:

• 10.0.39, from Proactive Quality Update 4 (PQU-4) onwards (CSU: 9.49.24184.3, Store Commerce App 9.49.24193.1)
• 10.0.40, from Proactive Quality Update 1 (PQU-1) onwards (CSU: 9.50.24184.2, Store Commerce App 9.50.24189.1)

Copilot functionalities in back office (Headquarters) are available starting with the following versions:

•   10.0.38 from Proactive Quality Update 5 (PQU-5) or subsequent updates
•   10.0.39 from Proactive Quality Update 3 (PQU-3) or later versions
•   All editions of Commerce version 10.0.40 onward

Next steps

Learn more about Dynamics 365 Commerce.

Engage with other Dynamics 365 users in our community forums to learn from their experiences and share your own.

Not yet a Dynamics 365 Commerce customer? Take a tour and get a free trial.

The post Copilot for Dynamics 365 Commerce revolutionizes retail with AI appeared first on Microsoft Dynamics 365 Blog.

Despite the convenience of online shopping, many shoppers still value the hands-on experience of visiting retail stores. The instant gratification, social interactions, and serendipity of physical shopping continues to attract buyers. With the evolution of technology, retailers are seeking more automated ways to fulfill their customers’ shopping needs. Self-service checkout solutions have become a crucial component of retail businesses’ strategies aimed at enhancing the overall shopping experience.

Long lines at checkout can result in decreased sales and unhappy customers. Modern shoppers seek control, ease, and security while purchasing, leading to a preference for self-service. Retailers are adopting self-checkout (SCO) systems to offer more personal and confidential buying experiences. The growth in SCO is partly due to labor shortages and rising wage costs. RBR research predicts self-checkout terminals will grow by 90% annually worldwide, indicating a trend toward faster, self-reliant service.

While there are clear advantages, it’s essential to acknowledge and address some of the challenges through technology. These challenges encompass issues related to scanning, the overall usability of checkout devices, losses attributed to theft and inadvertent misuse, as well as the absence of personal interaction.

Discover the benefits of Microsoft Dynamics 365 Commerces Self-checkout Preview. Self-checkout is available as a public preview.

Self-checkout in Dynamics 365 Commerce

The new self-checkout solution in Dynamics 365 Commerce is the same point-of-sale application (Store Commerce app) in self-checkout mode. Payment integrations, localization support, hardware integrations and any extensions built for the fixed till will also work for the self-checkout app. This allows retailers to quickly turn on self-checkout by leveraging their existing investments on Store commerce app for Windows. The Store Commerce app in self-checkout mode supports the following:

• Simplified login that allows cashiers to access the registers while also allowing shoppers to self-checkout.
• Out-of-box self-checkout layout for a quick start allowing users to scan items, support loyalty, and pay with credit or debit.
• Intuitive interface for shoppers that provides only the supported actions in self-checkout while disabling store associate actions.
• Call for assistance to allow shoppers to request assistance for elevated actions like voids, overrides and discounts.
• Browse operation that allows shoppers to browse for products that are not scannable or too big or too small to scan.
• The ability to restrict certain products from being purchased via self-checkout using a configuration in Headquarters.
• Offline support for business continuity even during network outage.
• Support for store commerce peripherals such as Scanners, payment terminals and printers for self-checkout.
• Adyen payment integration out-of-box.

Self-checkout to meet every retailer’s need

Retail sectors have diverse needs for point of sale and self-service checkout systems. Fashion retailers might prefer kiosk-based solutions for efficient scan-and-pay transactions. Grocery stores require self-checkouts integrated with weighing and bagging scale capabilities, along with cash handling machines. Store commerce self-checkout solution is built on commerce SDK and therefore is fully extensible for customers. Here are a few ways retailers can tailor the solution for their business needs.

Retailers can easily configure the default self-checkout layout to add operations that fit their business needs. For example, they can include an operation to apply coupons.

The Store Commerce self-checkout system is hardware agnostic and works across a variety of different hardware. Retailers cater to their unique needs regarding certain hardware peripherals through development of custom integrations with either the supported OPOS drivers or tailor-made SDKs.

Moreover, retailers have the advantage of integrating their existing localizations, payment methods, and additional extensions that are established within the cashier-managed workflows directly into the self-service checkout procedures.

In scenarios where cashier intervention might be necessary, such as when items with particular discounts are scanned, retailers can employ out-of-box extensions to promptly request cashier assistance.

Theft and losses in self-checkout

While self-checkout drives efficiency, there is still a high risk of theft and accidental loss as it’s easy for customers to by-pass scanning items or make honest mistakes. Retailers need to balance the efficiency of self-checkout with the need to thwart theft. Some retailers have achieved this by limiting the number of items in the checkout stand, some have eliminated cash as a payment method.

In addition, new theft detection systems are now available in the market using cameras and algorithms for spotting thefts. There are image-recognition algorithms used in combination with multiple cameras to detect shopper’s movements for theft.  Microsoft’s Azure vision, allows retailers to train the model with their own catalog and use camera-based image detection during checkout to identify and add items to the cart thereby reducing the risk of theft.

Retailers can use additional mechanisms to trigger cashier intervention for dubious scenarios such as repeated scanning of identical barcodes, unusual scanning of multiple low-priced items, items missing in the bagging area, etc .

Copilot

As we introduce Copilot features in Store Commerce, they could be leveraged easily for self-checkout. For instance, copilot can play a role while a customer is doing a price check or browsing for product availability. Voice-assistance in Copilot will help make the shopper experience smoother. Furthermore, we expect that Copilot scenarios such as product discovery, product suggestions, and personalized offers will be of high value for a shopper using a kiosk.

Future of self-checkout

Traditional self-checkout (SCO) methods often utilize kiosks, but retailers are also exploring scan-and-go options for added convenience. These allow customers to use their own devices or the store’s device to scan items and pay with their chosen method. Additionally, smart carts with integrated computerized screens are emerging, enabling shoppers to avoid traditional checkout lines for increased efficiency. However, while these innovations are gaining popularity, they might not be ideal for all merchandise types, could elevate theft risks, and might be more appropriate for stores with smaller footprints.

As Store commerce self-checkout gains wide adoption by multiple retailers in various industry segments such as apparel and fashion, department and grocery store we will keep a close eye on customers’ need and incorporate their feedback into the product.

For instance, our customers have requested that self-checkout systems include interruption features for assistance calls tailored to the retailer’s specific requirements for theft prevention or validation and provide an option for shoppers to select their preferred language.

It is becoming clear that retailers favor a hybrid model that combines human interaction with automated convenience. With the power and efficiency of Microsoft Dynamics 365 Store commerce point of sale alongside Store commerce self-checkout, we aim to provide customers and shoppers with exceptional shopping experience.

To enable Store commerce self-checkout today, please visit: Enable self-checkout in the Store Commerce app – Commerce | Dynamics 365 | Microsoft Learn.

The post Announcing public preview of Dynamics 365 Store Commerce Self-checkout appeared first on Microsoft Dynamics 365 Blog.

In an industry defined by both growth and disruption, retailers are depending on technology to navigate challenges ranging from shifting purchase habits to supply chain complexities. Next week, at the National Retail Federation (NRF) Big Show, Microsoft will demonstrate Dynamics 365 solutions powered by AI to help accelerate retail agility and innovation in the next decade.  

Gain valuable AI insights for your business

Learn more at the National Retail Federation Big Show

Register here

In addition to solutions powered by Microsoft Cloud for Retail, this vision for the future of retail is spotlighted by new Copilot capabilities for Dynamics 365 applications, including:  

• Microsoft Dynamics 365 Customer Insights, providing retailers with AI-powered experiences to transform daily marketing workflows. 
• Microsoft Dynamics 365 Supply Chain Management, providing AI powered guidance for demand planning, streamlining procurement, and enhancing supply chain visibility. 

NRF attendees can learn more about the transformative power of AI across the retail industry by attending two Big Ideas Sessions hosted by Shelley Bransten, Corporate Vice President, Global Retail, Consumer Goods, and Gaming Industries, and Kathleen Mitford, Corporate Vice President, Global Industry Marketing. 

Helping retailers personalize customer engagement 

Retailers often tell us that they’re under pressure to get marketing and customer experience projects and campaigns to market faster and are asked to do more with less. Yet, the processes and tools they use haven’t evolved to meet this demand.  

Deploying a project to market requires various roles or specialists, costly third-party agencies, and siloed applications to review data and create content. Monitoring results for optimization also becomes a timely and tedious task, having to track down the right people with the right application and the right data. These challenges not only hinder a campaign’s time to market and employee productivity, but can also result in a disjointed customer experience.

It’s not just our customers who are feeling the burden of these challenges. The market is feeling it too. For instance, 63% of surveyed retailers said they hope they can improve their marketing with AI in the next 18 to 24 months.¹ In the age of AI, shouldn’t it be easier to get your campaigns to market?  

We are announcing new Copilot features in Dynamics 365 Customer Insights that will transform how marketers manage and maintain projects and campaigns, increasing productivity, efficiency, and speed to market. These new capabilities build on Copilot features introduced in the past year, including, but not limited to, the ability to generate content ideas, query customer data using natural language, and create customer segments and journeys using next-generation AI. 

Marketers can kick-start their marketing project by writing their campaign objective in natural language, or by uploading an existing creative brief. The project board is then generated using the prompt or brief, connected organizational data, and previous campaigns in Customer Insights. The project board streamlines and connects all workflows into one place for building and managing marketing assets. 

“These new Copilot capabilities in Dynamics 365 Customer Insights will enable us to focus our time and energy in the right places—better informing us on optimization priorities without the need to dig into details manually. That alone saves so much time.” 

—Hannah Harper, Leatherman, Digital Marketing Manager 

From the project board, marketers can view the campaign’s target audience and segments, as well as recommendations from Copilot for additional segments that may not have been previously considered. Selecting a suggested audience segment automatically generates a complementary customer journey, saving marketers time while also helping them deliver a personalized customer experience. 

End-to-end customer journeys containing personalized touchpoints, such as promotional emails or event invitations, are generated using Copilot. Through our partnership with Typeface and its enterprise-grade generative AI capabilities, marketers can produce brand-authentic images across assets, supercharging personalized content for greater impact—all from within Dynamics 365 Customer Insights. Additionally, Typeface helps align content to the organization’s brand guidelines, including themes, fonts, and product images—extracted from a central asset library.

“Every aspect of the enterprise is already being redefined with generative AI, from developer to product to sales experiences. By combining Dynamics 365 Customer Insights with Typeface’s powerful storytelling engine, we’re fundamentally reshaping campaign workflows with generative AI by starting with just a goal. This means personalizing content at an unprecedented scale, bridging the gap between content and data, and ushering in a new era of marketing creativity and productivity.”

—Abhay Parasnis, Founder and CEO of Typeface 

This is just the beginning; we will be delivering further content curation, journey testing, and metrics monitoring to optimize campaigns. Our vision is that, together, this new AI-first experience will transform how marketers work by reducing the complexities of end-to-end campaign management and enhancing marketer productivity and ROI.

Learn more about our vision in the video below.

Build a real-time retail supply chain 

In 2024, retail supply chains face countless challenges, from labor shortages and increasing costs to complexities across omnichannel retail experiences. Enterprise AI solutions, now readily available for retailers, can power greater efficiency, productivity, and innovation across the supply chain.  

At Microsoft, we aim to deliver new supply chain innovations powered by Copilot to our customers through our open, flexible, and collaborative Microsoft platform; helping organizations to reduce risk, manage inventory, plan with flexibility, and make quick decisions across the whole supply chain.   

New Copilot capabilities to improve demand planning 

A retailer’s success hinges on having the right inventory at the right place at the right time, and that starts with successful demand planning. We recently announced new demand planning capabilities in Dynamics 365 in November 2023 that uses AI, machine learning, and external signals to predict demand accurately, and now we are enhancing it with Copilot. This will help planners understand how a forecast was generated and help them find patterns and anomalies. 

Copilot will also help them make sense of complex relationships across datasets using natural language interactions, and it will also assist with the routine tasks of making demand review reports, saving the planners time to focus on high-priority activities. 

Some of our customers, including Domino’s Pizza UK & Ireland, can use the new demand planning capabilities to make smart predictions from the data and insights.

“The demand planning capabilities in Dynamics 365 are helping us make the right decisions to lower wastage, avoid unnecessary deliveries, and be cybersafe.”

—Neha Batra, Head of Business Solutions, Domino’s Pizza UK & Ireland

The new demand planning capabilities create a more flexible, simplified, and intuitive user experience. Planners have an increased level of trust and can rely more on the forecast, knowing how it’s generated. The latest demand planning capabilities help reduce excess inventory and increase working capital for retailers.

New Copilot capabilities to improve productivity and proactively mitigate disruptions  

In November 2023, we also announced new Copilot capabilities in preview for Dynamics 365 that enable supply chain teams to take actions based on insights with conversational help while in the flow of work. This helps increase productivity and improved collaboration among employees across the supply chain and other cross-functional teams to proactively mitigate disruptions and further automate their workflows. See the capabilities in action.  

We also added new Copilot capabilities that will enhance inventory visibility and enable businesses to promise orders with improved accuracy, significantly helping brands elevate their consumers’ buying experience.   

In addition, a new copilot capability that helps to streamline procurement is now generally available. Procurement teams can seamlessly handle the purchase order changes in a scalable and efficient manner and assess the impact of changes downstream to production and distribution before making the right decision.   

Generate product enrichment content for e-commerce sites with Copilot 

Informative, story-rich product content can drive customer engagement and sales on e-commerce sites. Creating that content, however, can be time-consuming and challenging. In October 2023, we launched in preview the ability for business-to-business and business-to-consumer online retailers to use Copilot in Dynamics 365 Commerce to generate enriched product marketing content for their websites. This helps to decrease the time it takes to create compelling marketing content, while increasing productivity and increasing the overall number of online orders.

Visit our Microsoft booth at NRF this year to see these innovations in action.  

Discover the future of retail at NRF 2024 

Learn more about Dynamics 365 solutions for the retail industry and retail solutions introduced at NRF 2024. If you are registered for NRF 2024, we invite you to stop by our booth for demos of our solution and attend the following sessions:  

Retail unlocked: achieve more with Microsoft: Hosted by Shelley Bransten, Corporate Vice President, Global Retail, Consumer Goods and Gaming industries, Microsoft  

Sunday, January 14, 2024  | 1:00 – 1:30 PM  Eastern Standard Time (EST)

Join this interactive session to hear about one retailer’s AI journey to date. Hosted by Microsoft’s Corporate Vice President, Retail, Consumer Goods & Gaming Industries, Shelley Bransten, you’ll also learn about new AI-focused findings from Futurum Research and all new AI capabilities in Microsoft Cloud for Retail that will help power your AI transformation.    

Unlocking true customer-centricity: optimizing touchpoints across the shopper journey with AI: Hosted by Kathleen Mitford, Corporate Vice President, Global Industry Marketing   

Monday, January 15, 2024  | 11:45 – 12:15 PM  EST

Generative AI and large language models have captured the attention of executives across industries. While the technology’s use cases seem endless, smart retailers and brands must identify and prioritize the applications of generative AI that will be most valuable to their organization and partner with organizations who will treat their data with the highest privacy standards. Join us to hear how Microsoft is helping organizations large and small maximize their generative AI opportunities safely and responsibly.   

Unify your data to unlock AI opportunities: Hosted by Satish Thomas, Corporate Vice President, Microsoft Industry Clouds   

Tuesday, January 16, 2024 | 1:00 – 1:45 PM EST

Retailers are swimming in data all day, every day. Even with sophisticated legacy technologies and cutting-edge data science, the majority of that data goes uncollected. Insights stay hidden—often in plain sight. But that’s starting to change. AI tools are enabling retailers to understand their customers, merchandising, supply chains, operations, and workforces better than ever before. Join us to hear about the myriad insights that retailers are drawing from newfound and increasingly precise data sources to run leaner, smarter stores.    

¹ AI Adoption in Retail Survey, The Futurum Group, 2024

The post Shaping the future of retail with AI and Dynamics 365 appeared first on Microsoft Dynamics 365 Blog.

The changing nature of B2B commerce

The B2B commerce landscape is undergoing a significant transformation with the rise of millennials in decision-making positions. As digital natives, they value convenience, transparency, and efficiency in their buying experiences. They expect seamless online transactions, personalized recommendations, and real-time inventory visibility. This evolving dynamic presents opportunities and challenges for B2B transactions, requiring a reinvention of supply chains to adapt to these changing demands.

To cater to these preferences, B2B e-commerce platforms are investing heavily in user experience design, implementing AI-powered recommendation engines, and providing self-service tools that enable buyers to make informed decisions without extensive back-and-forth with sales representatives.

According to a report 43% of B2B buyers prefer not to interact with a sales representative, while 83% of buyers surveyed said they would prefer paying through digital commerce.  While this trend gives more control to buyers, it also improves seller productivity, allowing sellers to spend less time taking and processing orders while spending more time engaging customers in a meaningful way.

Microsoft Dynamics 365 Finance and Supply Chain Management is an application that offers capabilities for warehouse and D365 Commerce that includes a B2B offering along with ordering management. It helps businesses overcome ecommerce and supply chain challenges with a management solution that enables them to ensure resiliency with better inventory management while also helping them orchestrate orders across their various supply chain systems. This helps businesses scale their business as they continue to grow. Customers like Peet’s Coffee are working with Microsoft to deploy B2B capabilities for Dynamics 365 in their business for just these reasons.

Traditional companies in the market tend to separate out B2B and B2C commerce solutions. This has led to businesses having replicated data, digital assets, and disjointed messaging if they operate across both B2B and B2C. This has also resulted in a lack of innovation in the B2B e-commerce space driven by traditional perceptions around the B2B buyer journey. With young and tech savvy buyers now commonplace in the market, we must look beyond what has traditionally been available for B2B e-commerce and enable smarter and more intuitive buying experiences for users. This is what we set out to do with Dynamics 365 Commerce. By bringing the innovative and intelligent features of B2C to B2B e-commerce, companies can deliver curated and relevant content to their buyers and build richer B2B account relations. This includes activating capabilities like a responsive and modular UX, intelligent and AI-powered recommendations, context aware and immersive product search, shared ratings and reviews, cross channel asset management, distributed order management, and merchandising capabilities into the buyers digital purchasing experience. It also includes support for order ingestions from multiple sources including EDI through the use of our provider ecosystem.

We are also enabling relevant B2B capabilities for modern businesses, including flexible partner management and onboarding tools to reach partners directly online. Dynamics 365 Commerce is highly extensible as there is not one size that fits all. Streamlining the order process is made simpler with order templates allowing for curated and simplified self-service ordering options. Business partner accounts can see relevant discounts and spot promotions, or runout offers where relevant. Grid-based order entry allows for quick and efficient order placement with clear visibility of stock and order thresholds, supported with account-based payment options for quick order approval.

According to a survey of purchasing managers, 70% of them would prefer self-checkout purchasing for orders worth $50,000. This preference for self-checkout is in line with the growing trend of customers preferring to manage their transactions independently, without the support of service reps.

To manage customers with fewer sales reps, organizations need to find ways to optimize their reps by increasing their productivity and reducing the time spent building quotes and invoicing. This will allow sales reps to focus their time and attention on selling.

Using Copilot to democratize marketing

Peet’s Coffee Case Study

Peet’s Coffee was running their business on Dynamics 365 leveraging the SCM modules. The shape of the business had also changed to a consumer-packaged goods operation requiring more B2B sales. Peet’s Coffee leadership saw the need to improve their order taking process and found Dynamics 365 e-commerce as an ideal solution because it leverages the same platform as Dynamics Supply Chain Management. This would enable them to get faster time to value while focusing on optimizing targeted customer specific catalogs, customer specific pricing and trade agreements, easy reordering with order templates and the ability to collect payments online. The launch of their e-commerce portal culminated in an easy ordering experience, real-time prices, and increased seller productivity. Ultimately, Peet’s leapfrogged to a new state of business maturity and agility enabled by the e-commerce portal implementation.

“Dynamics 365 gives us the cloud-based architecture we require to support the growth requirements of the business. The combination of Dynamics 365, Power Platform, and Azure cloud services provides Peet’s with a scalable and supportable technology foundation for the future.”

Chief Information Officer, Allan Smith Peets Coffee

Conclusion

In conclusion, businesses must reinvent their supply chains to meet the demands of millennial buyers. They must also invest in user experience design and self-service tools to provide seamless buying experiences that cater to the preferences of tech-savvy buyers. Microsoft Dynamics 365 Commerce plays a pivotal role in this transformation, offering a platform that bridges the gap between B2B and B2C, enabling businesses to deliver curated and relevant content to their buyers, and building richer B2B account relations. The Peet’s Coffee case study exemplifies how Dynamics 365 Commerce enhances business agility and customer satisfaction in the modern B2B commerce landscape.

Learn more

Dynamics 365 Commerce delivers a comprehensive, yet composable, set of capabilities for both consumer and business-facing organizations seeking to expand beyond traditional digital commerce limitations and improve customer engagement, build brand awareness, streamline purchasing, and deliver exceptional customer experiences.

To learn more about Dynamics 365 Commerce:

Learn how SCM customer can implement B2B e-commerce and best practices.

Visit our website and request a preview of B2B e-commerce today.

We have Techtalks scheduled and here are the links:

TechTalk: Extend Dynamics 365 Supply Chain Management for an AI-powered B2B digital selling experience using Dynamics 365 Commerce | Dec 5, 2023

The post Extend your existing Dynamics 365 Supply Chain Management application to unlock a new AI powered B2B digital selling experience with Dynamics 365 Commerce. appeared first on Microsoft Dynamics 365 Blog.

Global retailers, manufacturers, and distributors continue to face the new normal of doing business today: economic volatility, unpredictable customer spending, and operational complexities. As we gear up for the holiday season, businesses that are agile and responsive will be poised to capture market demand and deliver an exceptional end-to-end customer experience. Adopting modern technology solutions can introduce agility to key processes overnight, and leaders should look across their supply chain functions to identify levers for maximum impact.

Supply chain technology leaders recognize that competitiveness—and in some cases, an organization’s survival—demands digital parity, if not leadership, so they now openly embrace exploratory IT investments.¹

One of those levers is warehouse management, a market that IDC reports grew at a compound annual rate of 14 percent in 2023.² By embracing modern, robotic, and AI-enhanced warehouse management solutions (WMS), organizations can drive meaningful results across the business in a relatively quick time-to-value.

In this post, we’ll explore why warehouse management solutions are needed and how Microsoft and Dynamics 365 enable customers to navigate ongoing disruptions, optimize inventory levels, and deliver on time with ease.

Dynamics 365 Supply Chain Management

Build a resilient supply chain

Take a guided tour

Navigate supply chain uncertainties with technology

While the early days of the COVID-19 pandemic are behind us, retailers and operators are still navigating the new normal, which includes:

• Growing labor constraints.
• Demand volatility.
• Multichannel distribution.
• Storage capacity challenges.
• Permeation of AI into core processes.

In the face of these challenges, there is an opportunity for businesses to embrace uncertainties with technology and maximize levers like distribution capacity, improved employee and warehouse productivity, and consistent operations during volatile times. Legacy enterprise resource planning (ERP) systems are often disjointed and lead to a delay in real-time insights and optimization.

What is a modern WMS?

A modern warehouse management system helps businesses manage and optimize key warehouse operations like inventory tracking and shipping coordination through an open and composable framework. It can integrate with multiple systems and platforms and helps support end-to-end business processes, from ERP to customer relationship management. For businesses that want to stay competitive in an ever-expanding fulfillment economy, a modern WMS meets those challenges with an agile, digitally connected solution that reduces costs through maximizing resources like employees, machinery and storage.²

Modern warehouse management solutions can help improve real-time visibility into inventory levels, provide the ability to automate and streamline operations, and drive greater efficiency across the organization.

Adopting a modern WMS can contribute to these outputs:

• Reduced costs through improved inventory turns and optimized storage space.
• Improved customer satisfaction via on-time and in-full delivery and improved fill rates.
• Business growth and agility to meet unexpected customer demand and product development.
• Automation and enhanced productivity to free up your employees’ time to focus on what’s next.

The benefits of a modern WMS

1. Reduced costs

Golden State Foods (GSF) is an industry leader that produces liquid products like sauces, dressings, and condiments for customers like McDonald’s and Chick-fil-A. With a 25 year-old legacy ERP system, GSF chose Dynamics 365 ERP solution’s Supply Chain Management and Finance to help create a modern, common platform with centralized reporting and more standardized processes to facilitate opening a new plant.

“We chose Dynamics 365 because we need modern technology that will evolve with us.”

–Carol Fawcett: Corporate Vice President and Chief Information Officer, GSF

With Dynamics 365 Supply Chain Management, GSF’s warehouse management processes were completely modernized. Dynamics 365 is being used to receive, put away, and consume inventory for production; report inventory as finished; store it in finished goods warehouses; and select it for shipment for customer orders. It prints standard barcode labels that are used at customers’ distribution centers for fast and accurate traceability—a considerable improvement from previous processes. This end-to-end visibility helps GSF operations managers improve inventory turns and make better decisions about production restraints and forecasting. With improved forecasting, GSF can reduce waste, optimize inventory, and increase its efficiency across its plants.

2. Improved customer satisfaction

Bedrosians Tile & Stone is one of the largest porcelain tile and stone importers and distributors in the United States, with 40 retail locations worldwide. It’s 30 year-old legacy ERP system impacted demand planning and forecasting, which was critical for Bedrosians’ massive 10,000-item inventory. Without accurate demand planning and forecasting, Bedrosians was reactive and vulnerable to market whims.

Like many retailers, Bedrosians saw customer demand skyrocket during the COVID-19 pandemic. Annual spending on home improvements grew, but without accurate demand forecasting, Bedrosians struggled to find that “just right” inventory on hand formula, often finding itself understocked or overstocked. With lead times as long as six months or more, the need to have accurate inventory levels—and visibility into them—couldn’t be more important.

Bedrosians’ legacy ERP impacted its ability to optimize inventory placement and as such, the company was at risk of promising products they couldn’t deliver or losing sales opportunities while inventory was in transit. Bedrosians chose Dynamics 365 ERP solutions to help optimize financial, inventory, purchasing, and planning capabilities to better streamline the movement of their globally sourced inventory. What used to be a manual guessing game has turned into an automated, scientific forecast based on historical data and industry trends. This ensures Bedrosians can capitalize on sales opportunities, despite months-long lead times, and deliver an on-time and in-full customer experience.

“Implementing Dynamics 365 has been a game-changer for our business. It has improved our operation and financial management. Real-time visibility, optimized procurement, and streamlined order processing has resulted in increased sales, improved margins, and a more efficient supply chain and positioned us for sustained growth in a competitive market.”

–Nirbhay Gupta: CIO, Bedrosians Tile & Stone

3. Business growth and agility

Barnas Hus is Norway’s leading children and baby products retailer, with both e-commerce and 28 physical stores. Working with a Microsoft partner, KPMG, Barnas Hus set out to face its supply chain challenges that were hindering its business growth, such as lack of visibility and inconsistent accuracy in its legacy ERP system. Barnas Hus embraced a modern, cloud-powered platform enabled by Dynamics 365. This technology-focused improvement helped the company transform its warehouse management, inventory control, production planning, and more—setting Barnas Hus up to meet growing customer demand.

Once they had made the shift, Barnas Hus opened a new state-of-the-art warehouse that utilizes autonomous robotics to accurately pick, sustainably pack, and trace every product. The modern warehouse management system improved inventory visibility and freed up employees to spend time with customers. The best part? The ease of implementation led to a quick time to demonstrate value and Barnas Hus saw its biggest month ever in revenue.

See how Barnas Hus embraced robotics with KPMG and Dynamics 365.

4. Automation and enhanced productivity

Michael Hill is a leading jeweler based in Australia with operations in New Zealand, Canada, and the United States. When the pandemic hit, its 300 stores were facing temporary closures and the company confronted logistic complications that forced expensive, indirect, and inefficient shipments to its customers worldwide. Michael Hill’s legacy ERP system was inflexible and lacked visibility and accuracy.

The international jeweler moved quickly to avoid harm to its business and its brand. It rapidly deployed Dynamics 365 and almost immediately began providing increased visibility into inventory availability across its supply chain. This gave Michael Hill the ability to treat each of its stores as a warehouse location, which seamlessly allowed customers to order items online with the option to pick up at the site of their choice or ship direct from that location. It also vastly reduced the manual labor previously required from Michael Hill employees to ensure fulfillment.

“We use the ship-from-store capability in Dynamics 365 to fulfill demand from many locations, rather than requiring human intervention whenever stock is transferred. That helps us reduce how many hops it takes to put a piece into the hands of the customers, and that’s our end game—a better experience.”

–Matt Keays: Chief Information Officer, Michael Hill

By implementing Dynamics 365 as its warehouse management system, Michael Hill was able to deliver agile flow solutions that freed up its employees to focus on more strategic initiatives such as loyalty programs and trialing new fulfillment models.

Learn more about Dynamics 365 solutions

To compete and thrive in market conditions today, organizations should look to adopt modern warehouse management solutions to better prepare for uncertainty, increased demand, and disruptive conditions. While legacy ERP systems are complex, Microsoft partners and Dynamics 365 solutions provide quick time-to-value and provide the agility and automation required for growth.

Explore a free guided tour of Dynamics 365 Intelligent Order Management.

Learn more about Dynamics 365 Supply Chain Management.

Footnotes

¹Gartner SC 2023 Hype Cycle for Supply Chain Execution Technologies, 2023.

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and HYPE CYCLE is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved. 

²Source: IDC TechBrief, Warehouse Execution Systems, Document number:# US51050623, August 2023.

The post 4 benefits of modern warehouse management solutions appeared first on Microsoft Dynamics 365 Blog.

What do customers want? They want the consumer goods brands they buy and love to deliver a total experience. One that is transparent across the product lifecycle and is personalized at every touchpoint, regardless of whether it’s the ever-demanding business-to-consumer (B2C) realm or the not-so-different-anymore business-to-business (B2B) landscape of consumer packaged goods (CPG) distributors and retailers.

According to Gartner® Top Strategic Technology Trends in Consumer Goods Manufacturing for 2023, the top CG technology trends in 2023 focus on customers, technology, and sustainability. This translates to consumer behaviors evaluating three primary areas:

• Financial impact and uncertainty. What is the value of this product? Is it worth the money? Does it work?
• Trust in manufacturer integrity. Is the manufacturer doing what it says it is doing?
• The experience working with and for a company. How do consumer goods manufacturers treat suppliers, employees, and consumers? Are they providing and participating in current platforms and technologies?

The pressure is on CPG brands to meet these accelerating expectations and answer these unspoken questions that are top of mind for consumers.

How can brands accomplish this when not all customer journeys are alike and consumers are in control?

Connect your brands, employees, and consumers

Evolve with changing consumer preferences

Explore solutions 

Evolving with the customer is essential

Journeys are no longer linear and are driven by the customer—be it the consumer, retailer, or distributor—who determines the preferred path including any stops, starts, and detours along the way. Giving them the option to choose what messages they want to receive along with when and how they receive them is essential for creating a successful journey. Some customers prefer human interaction, others self-service across digital channels, and many require a combination of physical and digital. Others prefer to avoid personal interaction and choose a tech interface whenever possible. Giving customers these choices require brands to have synergy across multiple experience disciplines. It requires a shift from customer experience (CX) to what Gartner® calls total experience (TX). According to Gartner®, “TX is a strategy that creates superior shared experiences by intertwining the multi-experience (MX), CX, employee experience (EX), and user experience (UX) disciplines.” A sophisticated customer experience is the goal, but more importantly, it is delivering a total experience that meets or exceeds customer expectations. Research on this topic brings home how critical this is. 

A recent Harvard Business Review article brings home how critical this is.

“Our recent survey of 6,200 customers in China, France, and the United States uncovered seven CX factors that directly influence customer satisfaction. The first four—convenience, choice, navigation, and payments—are indispensable. That is, the presence or absence of these factors determines whether a customer judges a particular experience as good or bad. Think of them as table stakes. The remainder—ambiance, expertise, and touch-and-feel—amplify the baseline level of satisfaction. While their presence boosts satisfaction from “good” to “very good” 70 percent of the time, their absence turns a “bad” experience into a “very bad one” 89 percent of the time.”

Identifying ways to understand and adapt to evolving consumer preferences along with delivering direct-to-consumer engagement is integral to enhancing the customer journey.

Our approach

It starts with data 

Brands are looking for ways to understand consumers better. They need insights in order to know them and orchestrate customer journeys as well as identify interactions that contribute to customer lifetime value (CLTV), churn, and loyalty. This requires CPG brands to gain a holistic understanding of consumers and build brand equity through tailored data-driven marketing and experiences.  

To achieve this, CPG brands need to leverage data from multiple sources, such as point-of-sale, e-commerce, social media, loyalty programs, surveys, and third-party providers, and combine them into a single view of the consumer. This improves consumer understanding, empowering brands to directly engage with individuals and target their personal needs, all powered by AI.

It requires elevating the consumer experience

In today’s uncertain times, consumers demand an end-to-end experience that provides value, quality, convenience, inclusivity, and sustainability. Brands must not only meet these expectations but also elevate the experience to the next level. This requires real-time personalization throughout the customer’s journey. Microsoft Dynamics 365 Marketing utilizes insights about the consumer and activates them in real-time to optimize journey workflows, to create generative AI-powered segments and content to deliver hyper-personalized experiences that drive customer engagement. For example, Campari Group, a worldwide leader in spirits, wines, and non-alcoholic apéritifs industry is using our solution to increase awareness of Negroni week, an event that celebrates one of the world’s greatest cocktails and raises money for global charitable causes. Microsoft Dynamics 365 Marketing generative AI Copilot is being used to send personalized emails to venue owners to get them involved. With generative AI targeting, Campari uses natural language to describe segments and uses generative AI Copilot for content ideas using key points to generate text suggestions expediting campaign creation and increasing marketer productivity. Watch Campari Copilot in Microsoft Dynamics 365 Marketing to learn more.

It’s collaborative

Whether it’s brand building, product development, supply chain, or customer care, everyone is responsible for customer experience and optimizing the customer journey. It is a collaborative effort to deliver a great customer experience and requires breaking down data, technical, and people. Customer data needs to be combined with business operations data, marketing, sales, service, and supply chain should work in unison and be seamlessly integrated.

Collaborative intelligence can help CPG brands and retailers:

1. Understand customer behavior, preferences, and needs better, and tailor their offerings accordingly.
2. Optimize their assortment, pricing, and merchandising strategies, and increase customer satisfaction and loyalty.
3. Innovate faster and launch new products that meet customer demand.
4. Build trust and transparency with each other and with customers.

This is exactly what Natuzzi is doing using our solution to bring beauty and timeless harmony to people around the world. Working with Microsoft Dynamics 365 enables Natuzzi to deliver a well-crafted experience across both B2C and B2B lines of business and empowers their entire global team spanning marketing, sales, field service, and customer care to deliver a seamless total experience. In a disjointed selling environment, Natuzzi can communicate better and more consistently with each customer with improved ongoing messaging, promotions, and events. With targeted campaigns, they are moving contacts to prospects and prospects to customers. Luxury furniture is a complicated market, and our solution keeps Natuzzi close to its customers and on top of market trends.

Learn more

Learn more about Microsoft Dynamics 365 Customer Insights, Dynamics 365 Marketing, and Dynamics 365 Sales to meet your customers’ expectations and bring your customers into focus.

You can also download a free trial of Microsoft Dynamics 365 Marketing. And for the latest on how Microsoft and our partners are helping retailers elevate the customer experience, download the e-book Reimagine Retail in the Digital Age.

Discover more Microsoft solutions for the consumer goods industry.

GARTNER® is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

The post Deciphering consumer desires: Elevating customer journeys in retail CPG appeared first on Microsoft Dynamics 365 Blog.

Resiliency for retailers might best be understood by thinking about the delight consumers feel when they order that specific, thoughtful gift online for the holidays or when they come across the perfect gift while shopping at a store. To be successful with consumers in these moments, retailers must have the right products in stock at the right time and deliver them quickly and cost-effectively. This is what resiliency for retailers looks like, but how do you build resiliency into your supply chain?

Microsoft Supply Chain Center

Reduce supply and demand mismatches by running simulations using AI and real-time, advanced analytics.

Try the preview

McKinsey & Company found that 75 percent of consumer packaged goods (CPG) supply chain leaders prioritize supply chain digitalization, suggesting that resiliency through digitalization is one strategy that retailers are exploring.¹ At Microsoft, we believe the path to retail resiliency lies in three interconnected capabilities: connectivity, agility, and sustainability, which we showcase solutions around at this year’s National Retail Federation (NRF) exposition in New York City.

Connectivity

True end-to-end visibility requires a platform capable of connecting and harmonizing data from new and existing sources. According to research commissioned by Microsoft from Harvard Business Review Analytic Services, 97 percent of executives agree that having a resilient supply chain positively impacts a company’s bottom line.² The same study found that most organizations’ digital infrastructure is composed of a mix of modern and legacy apps, with only 11 percent using a single integrated platform of modern, best-in-class applications.³ This makes any solutions’ connectivity a critical factor in building resilience and agility.

One merchant that is enjoying the benefits of connectivity and visibility is iFIT. iFIT is a leading health and fitness platform that markets several home exercise equipment brands. Recently, iFIT adopted the Microsoft Supply Chain Platform to bring together its systems and data. With this integrated, centralized view, iFIT can reduce the manual effort and guesswork involved in strategically placing inventory in its more than 40 forward-stocking locations. Utilizing built-in AI capabilities, iFIT increased efficiency from 30 to 75 percent on their forward stock inventory resulting in faster delivery times––reduced from a two-week window to two days––and increased customer delight.

Extensible systems increase connectivity, too, such as the ability to leverage highly functional micro-services like the Inventory Visibility Add-in for Microsoft Dynamics 365 Supply Chain Management. Users can enable the Inventory Visibility service free of charge to gain a real-time, global view of on-hand inventory and tracking across all data sources and channels. Additionally, the Inventory Visibility service allows users to avoid overselling by making real-time soft reservations and using the allocation feature to ring-fence valuable on-hand stock for essential customers or channels.

Learn more with the Inventory Visibility Add-in overview.

Another dimension of connectivity is collaboration. Dynamics 365 and Supply Chain Center include Microsoft Teams built-in, unleashing the power of collaborative applications for users, making all your business processes and applications multiplayer. With collaborative applications, team members can connect in real time, surface and act on insights from unified data, and swarm around supply chain issues to mitigate disruptions before they impact customers.

Connected systems and data create the visibility supply chains need to sense risks and illuminate opportunities––the necessary precursors to agility, which we look at next.

Agility

To enable agility, supply chain software needs to increase visibility across data sources, predict and mitigate disruptions, streamline collaboration, and fulfill orders––sustainably and securely. In short, companies need to understand the entire supply chain network. By connecting disparate systems and harmonizing data across the supply chain, companies gain a more comprehensive understanding of supply and demand. With Supply Chain Center, retailers can connect and harmonize data and generate supply and demand insights using AI to uncover patterns and projections based on historical and real-time inventory and order volumes.

One company using Supply Chain Center to build a more agile supply chain is Northern Tool + Equipment, a manufacturing and omnichannel retailer with 130 stores across the United States. Northern Tool + Equipment’s fragmented supply chain technology infrastructure had pushed lead times for the 100,000 items in its product catalog to four to seven days. In addition, many of the company’s products are very large, like generators and air compressors. The sheer size of these items brings further complexity to the challenge of optimizing shipping routes for cost and sustainability. Similarly, Northern Tool + Equipment struggled to provide firm delivery dates for online and in-store product orders. For a business that serves people who do tough jobs and rely on their tools for their livelihood, being competitive means offering delivery in one to three days and providing accurate delivery times.

Northern Tool + Equipment partnered with Microsoft to overcome these challenges with an end-to-end supply chain solution. The selection of Supply Chain Center meant that Northern Tool + Equipment could immediately begin to rationalize and connect every node of its supply chain with a solution designed to create a more resilient and sustainable supply chain through an open, flexible, collaborative, and secured platform. The result? Northern Tool + Equipment can provide customers with a committed delivery date and shipping costs while also ensuring one-day to two-day delivery within a specific proximity of its stores.

A significant factor in Northern Tool + Equipment’s lead time improvement is its use of Microsoft Dynamics 365 Intelligent Order Management capabilities, which allows organizations to connect and orchestrate order fulfillment across different platforms and apps. But Supply Chain Center has an assortment of capabilities to serve other retailers on the agility journey.

One such capability is the Supply Chain Center news module, which gathers information about world events and presents articles relevant to your business and supply chain. How can this feature be a functional building block of agility?

Let’s consider an example of a retailer selling portable air conditioners. Using the news module, the retailer could receive a news alert that a specific geography is forecasted to have the hottest summer on record. This would likely increase the expected seasonal demand for the product in the affected region. The retailer could capitalize on this intelligence by increasing their forecast during the planning process so that they can be prepared to quickly shift inventory to ensure coverage. 

In addition, Supply Chain Center connects with Microsoft Dynamics 365 Supply Chain Management, which gives retailers access to advanced warehouse management functionality, such as warehouse automation by integrating with partners like inVia Robotics. It also gives retailers the ability to set up pop-up warehouses in a matter of days in six easy steps. Continuing the example above, our portable air conditioner retailer might utilize the supply chain planning functionality and learn that they have insufficient warehouse capacity to meet the seasonal demand increases. In this case, they could use Dynamics 365 Supply Chain Management to open a new warehouse in a matter of days by utilizing wizards and templates and quickly deploying the mobile app. Similarly, the retailer could then improve warehouse productivity with InVia Robotics by leveraging robots to do the heavy lifting and traveling across the warehouse, freeing up workers to do the more complex task of sorting and packing. The value of these systems is getting the attention of organizations and analyst firms. Gartner® predicts that by 2026, 75 percent of large enterprises will have adopted some form of intralogistics smart robots in their warehouse operations.⁴

Sustainability, circular economies

In a recent survey, 46 percent of individuals who purchased products online said the most important thing they want brands to do is be socially responsible.⁵ This fact helps explain why 53 percent of organizations plan to increase their focus on sustainable sourcing in 2023.⁶ While there are several dimensions of social responsibility, sustainability is the most relevant to retail supply chain leadership. For retail supply chains, this can be challenging.

For retailers to lead not just the industry but to exceed consumers’ expectations for social responsibility, another challenge beckons—the utilization of circular economies. Even leaders in the EU, who successfully decreased material use by 9 percent and increased products derived from recycled waste by 50 percent,⁷ understand that while their progress is impressive, growth of circular economies is still limited compared to their actual material footprint. Still, the incentive for retailers, beyond the value of doing the right thing, is significant. One survey by Statista expects worldwide revenue of circular economy transactions to more than double from 2022 to 2026, growing from $338 billion to $712 billion.⁸

One way that Microsoft is helping brands meet the challenge is with built-in sustainability features for suppliers. One example is the FedEx integration with Intelligent Order Management––which is included in Supply Chain Center. The FedEx integration allows users to offer boxless returns to their customers by leveraging environmentally friendly QR codes to return items at more than 60,000 retail FedEx locations. Plus, retailers can utilize the self-service return functionality of the FedEx integration to easily manage all returns with complete visibility of every step in an item’s return to the warehouse.

Learn how FedEx and Dynamics 365 reimagine commerce experiences.

What’s next?

As we have seen here, the path to retail resilience in today’s competitive environment revolves around connectivity, agility, and sustainability. Brands should address disruptions and challenges with solutions that can exceed customer expectations, drive profitability, and improve sustainability.

Ready to see how Supply Chain Center can help your business on the path to retail resiliency? Watch our Supply Chain Management guided tour and sign up for a free 180-day trial of Microsoft Supply Chain Center (preview).

For a look back at NRF 2022, check out our previous blog: Dynamics 365 helps build the retail supply chain of the future. And take a look at the following posts to learn more about NRF 2023:

• Transform retail customer experiences with the Microsoft Customer Experience Platform
• Resilient Retail
• How Microsoft Teams empowers your retail workers to do more with less

Sources

¹McKinsey & Company, 2022. How consumer-packaged-goods companies can drive resilient growth.

²Harvard Business Review Analytic Services, 2022. A Supply Chain Built for Competitive Advantage.

³Harvard Business Review Analytic Services, 2022. A Supply Chain Built for Competitive Advantage.

⁴ Gartner, 2022. Gartner Predicts the Future of Supply Chain Technology. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved

⁵GWI, 2022. GWI USA.

⁶KPMG, 2022. The supply chain trends shaking up 2023.

⁷The World Bank, 2022. World Bank Releases Its First Report on the Circular Economy in the EU, Says Decoupling Growth From Resource Use in Europe Achievable Within Decade.

⁸Statista, 2022. Estimated revenue generated from circular economy transactions in 2022 and 2026 worldwide.

The post The Microsoft Supply Chain Platform enables resiliency for retailers appeared first on Microsoft Dynamics 365 Blog.

As the retail industry rebounds from the unparalleled disruptions to store operations over the last year, the store’s role in merchant strategy is evolving and being reimagined. For retailers to thrive in ever more competitive marketplaces, they must embrace technology solutions that enable a modern and intelligent store. Microsoft Dynamics 365 Commerce stands ready with the capabilities to accelerate and empower retailers in their digital transformation journey.

Enhance customer shopping experiences

As physical stores return to pre-pandemic operating capacity, retailers realize the extent to which a new normal for store operations has taken hold. The result is that they are searching for opportunities to leverage technology to improve and automate the in-store experience, reduce costs, enhance operational efficiencies, and ultimately, enhance customer shopping experiences.

As the amount of data generated is growing exponentially across the customer journey, from online to in-store and beyond, retailers need to leverage this data to bridge the digital to physical divide in a seamless and frictionless way. Dynamics 365 Commerce assists companies in these efforts with solutions that deliver curated customer interactions, enable contactless selling, maximize physical store revenue, streamline store operations, and reduce loss due to fraud.

Learn more about Microsoft Cloud for Retail.

Curated customer interactions

We have previously talked about how Dynamics 365 can deliver personalized digital customer engagement. The natural extension of personalized digital customer engagement is to bring the same strategy to the physical store. In this case, we speak about curating customer interactions by augmenting store associates with an unprecedented view of consumers, also known as clienteling.

This strategy is not new. Retailers have long sought ways to build long-term relationships with their most important customers. In the days before box store chains, repeat customers could reasonably expect sales associates to remember who they were, what their preferences were, and even have a good sense of the items in which they might be interested. As retail chains grew and expanded into e-commerce marketplaces, in-store associate turnover and customer mobility also increased. The result is the personalized experiences that customers desire decreased due to a lack of continuity of in-store associates and, to a lesser extent, the different stores that customers may visit. Another factor at work here is the disconnect between e-commerce marketplaces and physical stores, leaving frontline workers lacking critical data about customer purchases and preferences.

At Microsoft, we are actively enabling technologies such as AI and machine learning to change this situation by empowering store associates with better customer insights based on data gathered across every customer touchpoint. And by connecting the once siloed data of digital and physical enterprise systems, we are helping merchants provide an end-to-end digital buying experience across every stage of the customer journey. In physical stores, this means that associates can utilize handheld digital shared devices to access a full 360-degree customer profile. This provides frontline teams with AI-driven recommendations, access to real-time up-sell and cross-sell guidance, and even unlocks customer brand affinity or product preferences.

Enable contactless selling

One of the trends we highlighted in our recent blog on the 4 post-pandemic retail trends was contactless payments. And with good reason. Market studies in recent months found that a large percentage of consumers were still anxious about shopping in stores. One way that retailers can reduce this anxiety is by enabling seamless contactless selling experiences.

By enabling contactless payments, either via store associate handheld devices or with automated checkout systems, consumers have one less physical surface to touch. While no panacea for eliminating consumers’ health risk and associated anxiety, contactless selling has other benefits like reducing time spent in checkout lines and eliminating a point of friction in the purchase process. Ultimately, Dynamics 365 Commerce enables contactless selling with mobile point-of-sale (POS) and contactless payment solutions so that merchants can deliver safe and secure shopping experiences.

Learn more about contactless payments and other retail trends in our recent e-book: The Future of Commerce in a Post-Pandemic World.

Maximize physical store revenue

Successful merchants understand the importance of maximizing physical store revenue. With Dynamics 365 Commerce, retailers have a deeper understanding of purchasing habits that allow them to tailor product selections, offer timely and data-driven recommendations, and access any relevant promotions. Additionally, by developing a single view of customers for use at physical POS and connecting this with a real-time view of cross-store inventory and purchasing options, merchants can enable endless aisles to ensure that they never miss a sales opportunity. This translates into increasing the number of units sold per transaction and maximization of sales per square foot. Plus, Dynamics 365 Commerce also helps boost in-store team member productivity with inventory, shift, and cash drawer management actions across all role-specific workspaces.

Streamline store operations

Retailers that are seeking to streamline store operations should look to utilize edge-based technology to unlock new insights, such as identifying and responding faster to in-store profit gaps and improving the efficiency of store team members­-actions that ultimately serve to improve overall store profitability.

A byproduct of streamlining store operations by adopting innovative and connected technology solutions is that it decreases the time required to open new stores or add new franchises by removing friction from every part of business operations and processes. This is a pivotal area where the capabilities of Dynamics 365 Commerce can help to optimize retail operations and deliver friction-free shopping experiences to customers.

Reduce fraud loss

While retailers are rightly focused on reducing loss due to fraud, they must also focus on delivering data privacy and security. Dynamics 365 Commerce helps merchants maximize profitability by providing loss prevention tools that combat internal fraudulent practices. At the same time, Dynamics 365 Fraud Protection provides even greater protection for purchases and accounts with industry-leading enterprise-grade security that also reduces losses due to return fraud.

Learn more: Dynamics 365 Fraud Protection.

Creating the store of the future

By connecting digital and physical store systems, unifying the data that these systems collect, leveraging that data with AI and machine learning, and connecting that data to in-store team members, Dynamics 365 Commerce is helping retailers to create the store of the future. We believe that the modern and intelligent store is one where retail operations are transformed and reimagined, and we are enabling merchants on this journey to deliver curated customer interactions, enable contactless selling, maximize physical store revenue, streamline store operations, and reduce loss due to fraud.

What’s next?

At Microsoft, we will continue to deliver timely and innovative solutions that help companies enable the modern and intelligent store. If you are ready to start delivering unified, personalized, and seamless buying experiences for your customers and partners, we invite you to try a free trial of Microsoft Dynamics 365 Commerce today.

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The last few decades have seen monumental change in the retail industry. Specifically, technology has untethered the shopper from the store and allowed retail to take place anywhere, at any time. When viewed through hindsight, these changes occurred just in time, for without the e-commerce revolution during the past two decades, retailers would have faced a significantly more difficult situation during the recent pandemic. Nonetheless, innovative companies have been able to adapt and adjust to these challenging times.

Businesses looked to the role of technology in enabling the agility to not only meet emerging customer needs but also to drive lasting impact in their organization’s business efficiency, customer experience, and market position. Patagonia partnered with Microsoft and Dynamics 365 to help navigate through the market turmoil and continue to innovate and drive to meet their business goals.

The pandemic forced many retailers to rethink almost everything related to the purchase experience. Where and how can customers pick up and return their purchased items? How can they pay? What is the utility of a store in an online-first shopping environment? Questions like these are now being answered in ways that will reverberate through the industry long after the pandemic has receded.

Dynamics 365 has helped equip retailers with a flexible, unified, and seamless buying experience for customers and partners. With Dynamics 365 Commerce, businesses have been able to engage across traditional and emerging channels while allowing consumers the option to buy when, how, and where they want—on any device—by delivering a frictionless and consistent experience across online and offline channels.

As we continue through the pandemic, both shoppers and retailers will have to adapt to a new normal. Let’s take a closer look at some trends that will persist in retail for the time to come.

1. Flexible order fulfillment

2020 ushered in the mass adoption of non-traditional fulfillment opportunities. One of these new methods that became essential during the past year is BOPIS, or buy-online-pick-up-in-store. As the pandemic unfolded, retailers saw a 208 percent increase in BOPIS from the previous year as customers gravitated to the increased convenience and choice that flexible order fulfillment offered. This accelerated a trend that had been gaining ground in some industries, like grocery, and saw it spread to retail sectors of all kinds.

2. Flexible returns

Like flexible order fulfillment, flexible returns provide the customer with increased convenience, this time related to items they no longer need or are not satisfied with. Returns are costly, and COVID-19 supercharged their numbers, with 2020 seeing consumers return $428 billion in merchandise, with $102 billion attributed to online purchasing, up 38.5 percent from 2019. As we move forward, the challenge will be for retailers to manage costs around returns without depriving consumers of the ease of returns they came to expect during the pandemic.

3. Contactless payments

Of all the trends mentioned in this blog, contactless payment via radio frequency identification (RFID) and near-field communication technology was perhaps the most widely adopted before the pandemic. Even at that, the need for increased cleanliness protocols and a desire to avoid touching surfaces where possible meant that the use of contactless payments has increased by 30 percent since COVID-19 started. With continued growth expected, savvy retailers will no longer allow the purchase experience to be tethered to specific locations or modes of payment.

4. Omnichannel retail

Like contactless payments, omnichannel retail plans had already been a high priority for many companies pre-COVID-19. However, the pandemic forced many retailers to speed up transitions from mostly brick-and-mortar to a proper omnichannel solution. Omnichannel has become an absolute requirement for modern retailers to survive. Part of this transition includes a re-thinking of the physical store itself. Rather than acting as the critical location in the retail journey—a place for customers to browse for and purchase items—the store now serves as a place for customers to see, touch, and feel items they have discovered through other shopping channels before final purchase.

Microsoft is helping retailers deliver on their brand promises

In each of the trends mentioned, consumers rushed to welcome the added flexibility to the retail experience. As we continue through the pandemic and return to a new normal, consumers will be reticent to give their newfound conveniences.

At January NRF we announced Microsoft Cloud for Retail to help retailers deliver seamless experiences across the entire buying journey, and recently we announced even more capabilities within the Microsoft Cloud for Retail public preview to help businesses build flexibility into their systems in order to thrive in the post-pandemic world.

What’s next?

• Register for NRF Retail Converge and join our Big Ideas Session on June 21, 2021.
• Join the Retail Digital Forum on June 22, 2021.
• Contact Microsoft Dynamics 365 to get more information about Dynamics 365 solutions and capabilities.
• Stay informed about Microsoft Cloud for Retail. Learn how you can connect your customers, your people, and your data.
• Follow Microsoft Retail on social.
• Learn more about Dynamics 365 Commerce.

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