For retailers, unlocking the mysteries of cost

In the face of increasing consumer price sensitivity, retailers need a full understanding of their costs, including the underlying manufacturing costs of the products they sell, in order to manage margins and compete effectively. New tools, powered by artificial intelligence, enable just that.
These new capabilities, such as BCG’s own Retail AI, put retailers across industry segments—including grocery, mass market, apparel, and home improvement—in a position to build out data sets and product compositions by leveraging AI (for analyzing existing data) and generative AI (GenAI). Retailers can obtain a clear picture of what a product should cost and how its suppliers stack up against that target. They can also track changes in costs over time to reveal the biggest opportunities for savings by vendor, category, and other parameters based on commodity price movement. Using these new tools can deliver better prices for customers and boost sales for retailers and their suppliers.