An innovative AI framework has been developed to empower retailers in understanding and responding to the ever-changing sustainability preferences of consumers, enabling them to make informed business decisions.
Key Points
- Researchers develop an AI framework for retailers to track consumer sustainability preferences.
- The framework uses machine learning to identify consumer segments and their evolving preferences.
- It translates analytics into pricing, stock, and communication strategies for retailers.
- The study highlights the gap between consumers' stated sustainability concerns and actual purchasing behaviour.
- Improving transparency, affordability, and targeted communication can bridge this gap.
Researchers from Goa Institute of Management (GIM) have developed an AI-enabled framework to help retailer businesses understand and respond to changing consumer sustainability preferences within a given time frame, officials said.
With the rise of consumer activism towards sustainability, the most pressing question for retailers has been how to develop comprehensive, effective and responsive systems to track continual shifts in consumer preferences regarding product recyclability, affordability and brand equity.
Addressing Challenges in Traditional Retail Models
According to Sumir Tripathi, Associate Professor, GIM, most traditional models have proven ineffective, and the research addresses these challenges by providing actionable business strategies that can serve as the vision and mission of the corporate sustainability goals.
Published in the prestigious Knowledge Management Research and Practice journal, the research has been conducted in collaboration with researchers from Graphic Era, a deemed-to-be university in Dehradun.
How the AI Framework Works
The developed framework integrates machine learning methodologies such as Self-Organising Incremental Neural Networks (SOINNs), Principal Component Analysis (PCA), and Variational Autoencoders (VAEs) with knowledge management to provide identification of consumer segments in real time as they evolve, constant updates of insights regarding a given consumer; translating analytics into pricing, stock, and communication strategies and enhanced flexibility, agility and responsiveness in decision-making within the organisation, the officials said.
"What makes this framework unique is its ability to conceptualise consumer insights as mutable organisational knowledge that is created, shared, refined and restructured across the organisation. The research delves into five consumer groups influenced to varying degrees by sustainability, from the most committed 'sustainability champions' to more conventional and price-focused shoppers," Tripathi told PTI.
Bridging the Gap Between Concern and Action
"Such knowledge informs companies' ability to craft bespoke strategies that integrate sustainability with business pragmatism. A key finding of the study is the gap between consumers' stated concern for sustainability and their actual purchasing behaviour. This gap is influenced by factors such as price and lack of trust," he added.
The study suggests that improving transparency, affordability and targeted communication can help address this issue.
The Role of AI and Organisational Culture
Speaking about the research impact, Dinesh Chandra Pandey from Graphic Era, said, "The study optimistically speaks about the role of the stated organisational culture and AI in fostering trust in analytics and the degree to which analytics are used in practice".
"As sustainability competitiveness is no longer solely dependent on data analytics, the research provides insights on how organisations integrate this information into their knowledge systems and decision-making processes, highlighting the need for continuous learning and adaptation in response to evolving consumer behaviour," Pandey said.
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