Retail Frontier Firms are evolving their operating models to keep pace with increasingly dynamic markets, using AI to support more responsive and resilient decision-making and execution across commerce channels. Rather than improving individual functions in isolation, these organizations are rethinking how commerce operates end to end, enabling AI agents to work alongside people to support faster, more consistent outcomes across the business. This evolution is accelerating as retailers navigate rising customer expectations, sustained margin pressure, volatile demand, and ongoing labor constraints: conditions that benefit from decisions being made and executed more continuously.

In Retail Frontier Firms, AI capabilities are embedded where decisions and value are created: in stores, at the digital shelf, across merchandising, pricing, fulfillment, customer service, and checkout. AI agents interpret signals from customers, inventory, suppliers, and channels and help coordinate actions across the enterprise. This supports retailers as they respond to change with greater speed, consistency, and scale across touchpoints.

This operating model is enabled by agents that share context and operate cohesively across the retail ecosystem. At the core of agentic commerce is Model Context Protocol (MCP), which provides AI agents with access to a shared, enterprise-grade understanding of products, inventory, pricing, policies, and customer intent. By grounding agents in a common business context, MCP helps support aligned, governed, and consistent decision-making across channels and functions. The future of retail is increasingly shaped by a human and AI agent operating model, connected by shared context and open protocols.

• Model Context Protocol (MCP) unlocks hundreds of thousands of business functions for secure, real-time use by agents, developers, and applications. 
• Agent Communication Protocol (ACP) enables agents across merchandising, supply chain, store operations, and service to collaborate end to end, helping reduce fragmentation and align execution across functions.
• Payment and transaction agent protocols extend AI capabilities through checkout and settlement, supporting trusted, compliant transactions across in-store, online, and conversational commerce.

Together, these capabilities support a more outcome-driven operating model focused on availability, margin, conversion, service levels, and loyalty. Humans define strategy, priorities, and guardrails, while AI agents help orchestrate execution across day-to-day operations: supporting modern retail operations designed for Commerce Anywhere.

Emerging retail trends shaping the future of commerce

As consumer expectations continue to rise, shoppers increasingly demand seamless, continuous interactions where they move effortlessly from social-commerce discovery to mobile checkout, in-store pickup, curbside fulfillment, or voice-activated reordering. Frontier retail responds to this shift by dissolving the boundaries between channels and touchpoints, allowing commerce to adapt in real time to customer intent, location, and context. For brands, this means the ability to deliver frictionless, anticipatory commerce at scale by meeting customers wherever they are, with relevance and speed, without adding operational complexity.

The industry is rapidly shifting away from static, siloed channels toward autonomous, context-aware agents that orchestrate buying journeys seamlessly across stores, digital experiences, and conversational interfaces. Agents move beyond traditional personalization. They actively guide product discovery, shape contextual offers, negotiate availability, and coordinate fulfillment, helping to continuously optimize inventory, pricing, promotions, and supply-chain decisions behind the scenes. As personalization and automation become table stakes, agentic AI emerges as the strategic engine driving scalable growth and sustainable Commerce Anywhere.

Introducing Microsoft Dynamics 365 Commerce MCP Server

Agentic commerce introduces a new operating model in which AI agents collaborate through MCP, enabling continuous decision-making and coordinated execution across the retail value chain. The new Dynamics 365 Commerce MCP Server exposes core retail business logic including catalog, pricing, promotions, inventory, carts, orders, and fulfillment as MCP-enabled capabilities. Expected to be in preview in February 2026, this will allow retailers to build agentic commerce experiences where AI agents can securely discover, decide, and execute retail workflows across digital, physical, and conversational channels.

By combining the ERP, Analytics, and Commerce MCP servers, Dynamics 365 supports a more agent-driven operating model in which front-office experiences and back-office operations are connected and optimized, helping retailers operate with greater agility and readiness for Commerce Anywhere.

How retailers can begin adopting agentic commerce today

Retail leaders can begin moving toward agentic commerce by adopting AI agents in three practical ways:

1. Starting with agents embedded in Dynamics 365
2. Extending capabilities through custom-built agents using MCP
3. Leveraging partner-built agents across the broader retail ecosystem

Together, these approaches allow retailers to progress at their own pace while aligning agent adoption to their operating model, business priorities, and maturity.

1. Start with agents embedded in Dynamics 365

Purpose-built agents are designed to address common retail challenges and operational friction points. Dynamics 365 agents and retail industry agents can be embedded directly into core business processes, allowing teams to realize value quickly.

Microsoft retail industry agents, like the Catalog Enrichment Agent and Personalized Shopping Agent are examples of vertical-specific agents designed around retail data models, workflows, and decision patterns that support scenarios like product discovery, assortment accuracy, and personalized engagement without requiring custom development.

Today, in Dynamics 365 the Supplier Communications Agent is a good example of embedded agents in action. Retailers can proactively monitor supply signals and engage suppliers in real time to confirm availability, align delivery timelines, and respond to changes earlier. This supports faster coordination, fewer surprises, and more reliable execution at scale.

2. Build custom agents using MCP

Retail operations are shaped by business logic that is unique to each organization: driven by merchandising strategies, store formats, service models, and supply-chain constraints. Microsoft Copilot Studio enables retailers to build custom AI agents that encode their own rules across replenishment, allocation, fulfillment, and store execution, aligning agent behavior directly to how the business operates.

These custom agents can operate across planning and selling in the flow of work using MCP-powered access to enterprise systems. Inside Microsoft Teams, Merchandising Managers and Planners can collaborate in real time with agents that access products, demand forecasts, supplier relationships, inventory, and pricing through Dynamics 365 ERP MCP.

On the selling side, through the Dynamics 365 Commerce MCP Server, your custom agents can extend intelligence into customer experiences. Agents can discover products, personalize offers, assess availability, reserve inventory, and complete transactions across digital, physical, and conversational channels while operating with a unified view of pricing, promotions, and fulfillment.

3. Extend agentic commerce through partners and the ecosystem

Retailers can further accelerate agent adoption by leveraging partner-built agents designed for specific retail scenarios and industries. Commerce MCP enables software development companies and system integrators to build agents more quickly by reducing integration overhead, standardizing access to retail data, and maintaining enterprise-grade trust and compliance.

Early partner solutions already demonstrate the breadth of what’s possible, from store associate productivity and clienteling to conversational commerce and business-to-business (B2B) buying experiences, including:

• Amicis: The Store Commerce Agent is a voice-first, screen-aware assistant designed for in-the-moment store execution. It can help associates complete high-friction tasks like returns, exchanges, order lookups, and policy checks in Dynamics 365 Commerce using natural voice commands, while adapting to what’s on the POS screen.
• Evenica: The B2B Licensee Product Request Agent uses conversational AI and image recognition to support licensees in finding beverage products. When a product is not available in the catalog, the agent can create a request case to support the product intake process.
• Argano: The Retail Clienteling Agent offers a conversational clienteling experience by bringing together customer insights, product data, and agentic AI into a single, governed workflow. It helps retail associates improve customer relationships by delivering personalized, brand-aligned interactions before, during, and after in-store appointments.
• Sunrise: The Commerce Companion is a suite of retail agents that help simplify everyday store operations across inventory and fulfillment to purchasing and store processes. Using natural language, it is designed to deliver fast, accurate answers and guided actions, which can enable associates to serve customers efficiently while keeping operations moving smoothly.
• Visionet: FashionGPT Agent can turn natural-language shopping intent into real-time retail execution across product, pricing, inventory, and promotions. It drives the end-to-end shopping journey and help turn conversations into measurable actions across channels.

Together, embedded agents, custom-built agents, and partner solutions give retailers flexible entry points into agentic commerce supporting near-term impact while laying the foundation for a more adaptive, AI-enabled operating model across Commerce Anywhere.

Agentic retail with Dynamics 365 in action at NRF 2026

At NRF, we will demonstrate how Dynamics 365 works with Copilot and agentic capabilities to support Commerce Anywhere and more efficient, end-to-end retail operations. We will share examples of how retailers are using Dynamics 365 to evolve their operating models and advance Frontier Firm capabilities.

Visit us during NRF expo hours at Level 3, Booth 4503, and join the related theater sessions at our booth:

• Beyond the Boutique: How Frette Uses AI to Transform Store Experience
  January 11, 2026 (Sunday), 2:00 PM ET
  Session led by Sunrise Technologies
• Reimagine retail business processes with Agentic ERP
  January 13, 2026 (Tuesday), 2:30 PM ET

The future of retail belongs to frontier organizations that can sense, decide, and act in real time. With agentic commerce enabled by Dynamics 365, retailers gain the foundation to move faster with confidence, aligning strategy, execution, and customer experience through intelligent agents that operate seamlessly across every channel. We look forward to connecting with you in New York and exploring how agentic business applications in Dynamics 365 can support your next step forward.

The post Agentic AI in retail: How Dynamics 365 powers Commerce Anywhere appeared first on Microsoft Dynamics 365 Blog.

Markets are shifting faster than traditional operating models can adapt. Customer expectations are rising. Capital constraints require every decision to deliver measurable value. In this environment, organizations that thrive are those treating business model innovation as a core capability–not an occasional strategy exercise. They are rethinking how value is created, how operations scale, and how technology supports the enterprise. 

ERP is evolving to meet this moment. As Satish Thomas described in his recent blog, we’re entering the era of agentic business applications: systems moving beyond recording transactions to actively orchestrating processes, anticipating needs, and adapting to change. For leaders, this evolution means ERP is becoming a system of action. It aligns people, data, and workflows around the outcomes the business is driving toward. 

Why rental business models are accelerating 

In asset- and across product-driven industries, the ability to generate value from equipment, tools, and machinery has always been central to business performance. Increasingly, customers want access to what they need, when they need it, without long-term ownership. This asset-as-a-service shift is expanding across industries–from heavy equipment, consumer goods, and automotive to medical devices, technology assets, and renewable energy. 

Global forecasts underscore this momentum. Industry forecasts from the American Rental Association and independent market analysts indicate the North American equipment and tool rental market will exceed $80 billion. Global rental and leasing revenues are already well above $500 billion annually. Similar trends are emerging in adjacent verticals, all signaling that the opportunity extends far beyond traditional equipment categories. 

Today, rental processes often run across fragmented systems for quoting, dispatching, billing, and financials. The result: avoidable idle time, slow handoffs, margin erosion, and most critically, subpar customer experiences. 

This is where Dynamics 365 ERP can help you with transforming your rental operations business processes. 

A strong connected foundation  

Operational excellence in rental management demands more than isolated workflows. It requires seamless integration and orchestration across the entire lifecycle. From rental rate management, quoting, and asset reservation to contract management, inspections, maintenance, and billing, every step must work in harmony to keep revenue moving and customers delighted. 

Building these capabilities into Dynamics 365 connects the full lifecycle of work within a single agentic ERP. 

Today, we are announcing that we are making investments to accelerate adding new capabilities for rental operations. These capabilities are now in development, planned for release in Q4 of 2026, including new ERP capabilities designed for: 

• Quoting and reservations to confirm availability and seamlessly convert opportunities into contracts. 
• Contract and pricing management for short- and long-term rentals, rent-to-own programs, or seasonal pricing with flexible terms and rate structures. 
• Inspections orchestration to coordinate inspections upon deliveries, transfers, and returns. 
• Billing and invoicing tied directly to rental activity to improve accuracy and reduce reconciliation effort. 

Rental operations succeed when every handoff–from quoting to return–is coordinated and timely. The forthcoming capabilities bring structure and clarity to these moments. They are designed to help organizations accelerate deal cycles, improve asset utilization, enhance customer satisfaction, and reduce reliance on custom or manual processes. 

By unifying these processes inside Dynamics 365, leveraging the composability of Dynamics 365 Finance & Supply Chain Management, Project Operations, and Field Service, organizations will be able to run rental as a natural extension of their operations rather than as a separate system or afterthought. 

Driving utilization, uptime, and margin 

The levers that shape rental performance–utilization, uptime, margin, and cash flow–are all influenced by how well operational data connect across the lifecycle. When organizations have a single view of reservation status, asset availability, and maintenance needs, they can plan more effectively and limit avoidable idle time. Consistent pricing and billing structures then help ensure every transaction reflects the same rules and logic, reducing confusion and rework. When maintenance activities are linked to actual rental usage, teams can schedule work proactively, support asset longevity, and reduce the risk of unplanned downtime. 

With these elements working together, rental operations can run with greater predictability – improving financial clarity while delivering more reliable, trusted customer experiences. 

Turning operational telemetry into financial clarity 

Operational data is only as valuable as the financial clarity it enables. Information such as rental item status, reservations, and maintenance history can become a strategic asset when used to drive accurate forecasting, informed capital allocation, depreciation planning, and profitability analysis. By connecting operational metrics with financial outcomes, organizations can optimize resource utilization, reduce risk, and uncover opportunities for growth. 

Enabling a strong ecosystem  

The rental management capabilities that we are developing in Dynamics 365 will form a robust foundation for rental businesses. Rental operations vary significantly within and across industry verticals. To address this, we continue to build on our proven model of success. We are empowering the extensive ecosystem of Microsoft Dynamics 365 partners and ISVs to deliver specialized, deeply vertical solutions that meet unique business needs. 

Because these foundational capabilities will run natively in Microsoft Dynamics 365 on the Microsoft Cloud, customers, ISVs, and partners can extend them with AI agents using MCP and Microsoft Copilot Studio to support vertical-specific requirements from front-office process optimization and automation to compliance, pricing strategies, and equipment lifecycle planning. The flexibility of the Microsoft Cloud, combined with advanced AI, is designed to help organizations accelerate innovation, optimize operations, and deliver differentiated customer experiences that drive growth and profitability. Microsoft remains committed to enabling innovation across the ecosystem.  

Microsoft Ignite 2025: Powering Frontier Firms with agentic business applications

Looking forward: the future of rental, built into agentic ERP 

Flexible, service-based operations are transforming how organizations create value from their assets. Our investment in rental management capabilities is designed to help customers meet this moment. It will simplify processes, improve visibility, and deliver measurable business outcomes. 

If your organization operates or supports rental models today, now is an ideal time to explore what’s possible with Dynamics 365. If you’re attending Convergence 2025, you’ll see firsthand how these investments align with our broader vision for adaptive, agentic ERP systems–solutions that work alongside your teams to drive operational excellence and unlock new opportunities for growth. 

The post Transforming how organizations run rental operations with Dynamics 365 ERP appeared first on Microsoft Dynamics 365 Blog.

In today’s retail landscape, payments have evolved into a strategic inflection point—where customer expectations, brand trust, and operational efficiency converge. No longer just the final step in a transaction, payments shape the overall customer experience and directly influence conversion, satisfaction, and loyalty. As consumers engage across physical stores, mobile apps, and digital platforms, they demand seamless, secure, and flexible payment options tailored to their context. At the same time, as retailers expand into new geographies, they must navigate a complex landscape of local payment preferences, regulatory complexities, and asynchronous processing requirements. Retail payment innovations are clearly needed.

A New Solution in Partnership with Adyen

Meeting these demands requires a payment infrastructure that’s not only omnichannel and secure, but also globally adaptive—capable of scaling across geographies while delivering localized, compliant, and consistent checkout experiences. In short, payments are not just an operational necessity—they’re a growth lever and competitive differentiator in an increasingly borderless retail economy. Dynamics 365 Commerce, in partnership with Adyen, offers a native payment connector which enables retailers to meet this challenge head-on, offering a modern approach to payments that supports global expansion, operational efficiency and elevates customer experience. 

Adyen is a global payment platform serving almost 100 countries and expanding rapidly. It supports a wide range of payment methods across regions and channels—from credit cards and digital wallets to Pay by Bank (open banking) and BNPL providers. Its unified commerce approach allows retailers to consolidate payment processing, fraud prevention, and reporting into a single system. The payment connector to Adyen is maintained and continuously enhanced by the Dynamics 365 Commerce product team in close collaboration with Adyen, which not only reduces technical overhead, but delivers secure, flexible checkout experiences across both physical and digital storefronts.  Recent updates focus on enabling secure, mobile-ready operations—empowering retailers to offer greater payment flexibility to consumers while positioning their businesses for future geographic expansion. 

Let’s explore some of the latest retail payment innovations helping retailers achieve these strategic goals. 

Wallet Payments 

NFC based wallets like Apple Pay, Google Pay, and Samsung Pay have moved from novelty to necessity. These contactless options not only offer enhanced security through tokenization but also speed up checkout times significantly. In addition to NFC wallets, the QR code-based wallets like Alipay, WeChat Pay, PayPay etc. enhance customer convenience and satisfaction. These digital payment methods offer a fast, secure, and contactless way to complete transactions, catering to the growing preference for cashless payments. Dynamics 365 Commerce leverages Adyen to help the merchants easily enable these wallets, and attract a broader customer base, including tech-savvy shoppers and international tourists who rely on these platforms. 

Buy Now, Pay Later (BNPL) 

BNPL services have exploded in popularity, particularly among younger shoppers. By offering instant financing options at the point of sale, retailers can increase average transaction values while giving customers the flexibility they crave. Merchants using Dynamics 365 Commerce with Adyen connector can leverage BNPL providers such as Klarna and Affirm in stores which can help increase the Average Order Value without burdening the customer’s wallet. 

Mobility to In-Store Payments 

Enabling store associates to take payments wherever the customer significantly enhances the shopping experience by offering convenience and flexibility. This fundamentally changes the in-store experience by: 

• Reducing checkout lines and waiting times 

• Enabling personalized service where customers are, rather than forcing them to a central checkout 

• Allowing for immediate product information, inventory checks, and payment processing in a single interaction 

• Creating opportunities for clienteling and relationship-building throughout the shopping journey 

 A development in retail payments is the rise of using mobile phones for payment capture, particularly Apple’s Tap to Pay on iPhone. This technology transforms standard iPhones into payment terminals, eliminating the need for traditional POS hardware. Merchants can now run the Store Commerce application on iPhones and leverage Adyen connector to accept the NFC based card payments on the iPhones. 

 Similarly, Android-based All in one payment terminals such as Adyen’s Castle devices enables the retailers to run the Store Commerce app from Microsoft and capture card and wallet payments.  

Pay by Link 

The Tap to Pay on iPhone is great for NFC based card payments while Android Castle devices are great for all types of cards i.e., with or without NFC chips and QR code-based wallet payments, however, supporting local payment methods which require asynchronous processing is usually a challenge. These payment methods require the commerce solution to listen to payment notifications from the payment processor and process the transaction accordingly. Dynamics 365 Commerce now supports a new payment method from Adyen named Pay by Link which generates an Adyen hosted payment link. Opening the link directs the in-store customers to a secure checkout page on their phones, enabling various payment methods supported by Adyen, including the local payment methods which require asynchronous processing.  

It’s important to call out that the Pay by Link payment method does not require any specialized hardware such as payment terminal or special tablets and does not even require a hardware station which means that even the web-based cloud point of sale can accept digital payments without a need to maintain a hardware station in the store. Pay by Link can be very effective for line busting scenarios as the store associate can scan the customer items and generate a payment link for the customers and suspend the transaction. The customers can make a payment while in line and when they reach the cashier’s counter, the cashier can recall the suspended transaction, print receipts and complete the transaction. 

 Using these various options, Dynamics 365 Commerce empowers merchants to accept payments anywhere—from pop-up shops to home delivery—while maintaining brand consistency and security standards. These mobility options also enable a more efficient use of floor space and help merchants to rapidly scale operations for seasonal demands without investing in additional terminals. 

Intelligent payment routing: the hidden cost-saver 

While consumers rarely think about payment processing networks, retailers know that every transaction carries costs. When a customer uses a debit card, the transaction can potentially be processed through multiple networks. While many retailers default to major card networks, regional debit networks like STAR, NYCE, and PULSE often offer substantially lower interchange fees. 

Merchants using Dynamics 365 Commerce can now benefit from Adyen’s capability to automatically identify eligible transactions and route them through the most cost-effective network. A retail payment innovation resulting in significant savings for merchants —without any change to the customer experience. 

Productivity through consistent user experiences 

The benefits of modern payment solutions extend beyond the customer-facing advantages to significantly impact associate productivity. When store employees interact with a consistent, intuitive user interface across all point-of-sale functions, training time decreases while efficiency soars. 

Dynamics 365 Commerce now supports a unified payment experience across all payment methods. This enhancement is aimed at eliminating the cognitive burden of switching between different interfaces for various payment methods. Associates can move seamlessly from processing a standard credit card payment to handling a BNPL transaction or a gift card payment without missing a beat. This consistency reduces transaction errors, speeds up checkout times, and allows staff to focus on customer service rather than struggling with cumbersome payment processes.  

The new payment flow is really a step in the right direction. There are numerous options available today, whether it’s cryptocurrency, financing, or other digital payment methods. The ability to easily navigate payment is important for both our company and the customer. Everyone will have a preference and being able to accommodate that easily allows our staff to focus on the customer instead of trying to coordinate complex exchanges between systems. We see a lot of potential in this style of payment flow, streamlining the process and reducing unnecessary button grids.

– Chad Davison, IT Systems Team, Memory Express Inc. 

Embedded fraud protection: securing the transaction ecosystem 

As retail payment innovations evolve, so do the tactics of fraudsters. Retailers with robust fraud protection not only minimize direct losses but also preserve customer trust. Dynamics 365 Commerce now enables the merchants to leverage the built-in risk management capabilities in Adyen for ecommerce and Pay by Link transactions. Any fraudulent transaction prevented represents both saved revenue and a protected customer relationship.   

Enabling post-visit and remote payment experiences 

Dynamics 365 Commerce continues to expand its support for asynchronous payments, aiming to give merchants greater flexibility in how and when customers complete transactions. One such planned future enhancement is the ability for store associates to generate orders—including shipping details—and send a secure payment link to the customer, enabling them to finalize the purchase at their convenience. If payment isn’t completed within a specified timeframe, the system can automatically cancel the order and release the inventory. 

This approach supports more flexible purchasing journeys, for example, when a customer needs time to consider a larger purchase. Future enhancements also aim to extend this capability to call centers, allowing representatives to send secure payment links instead of collecting payment information over the phone. This would support additional modern payment methods and improve both security and customer experience for remote transactions. 

Bringing It All Together 

Retailers making the most of today’s retail payment innovations often take a unified approach, treating technologies like digital wallets, BNPL, Pay by Link, and mobile SoftPOS not as isolated tools but as components of a cohesive payment strategy. With support for these capabilities, along with Adyen’s built-in risk management and intelligent routing features, Dynamics 365 Commerce helps merchants design payment experiences that can enhance convenience, improve operational flexibility, and support security standards. 

As the payment landscape continues to evolve, success will hinge not on selecting a single technology, but on integrating multiple options to align with customer preferences and operational needs. By building a flexible, future-ready payment foundation, retailers can better adapt to changing expectations and create experiences driving efficiency and customer satisfaction. Learn more about other retail payment innovations, along with what is new and what is coming to Dynamics 365 Commerce in our release planner.  

The post Next-Gen Retail Payments: Trends, Tech, and Transformation using Dynamics 365 Commerce + Adyen  appeared first on Microsoft Dynamics 365 Blog.

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.

Contact us

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.

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