What Retailers Should Know About AI in ERP

The enterprise resource planning (ERP) market is projected to reach £72 billion by 2032, with cloud-first strategies and AI adoption driving much of that growth. Today, 70% of CIOs cite AI and predictive analytics as top priorities in their ERP roadmap, and around 83% of ERP projects now include AI capabilities. In retail, this shift is especially critical because AI-enabled ERP systems are helping mid-sized UK retailers forecast more accurately, adapt faster and operate more efficiently.

As the pressure to deliver margin and agility grows, these smart systems are becoming essential. So what exactly is AI doing for ERP, and what should retail leaders know?

What’s Happening in the World of AI?

AI is no longer confined to labs or tech giants, it’s reshaping how everyday businesses operate. Since the release of ChatGPT, enterprise adoption has surged and ERP vendors are racing to get ahead. Global tech leaders like Google, Amazon, Meta and Apple are investing millions of pounds to embed AI deeper into their platforms, which has a cascading effect across enterprise software, including ERP. For retailers, this means faster access to smarter tools. As these tech giants innovate, ERP systems gain new capabilities like intelligent automation, natural language search and predictive analytics, all designed to make day-to-day decision-making easier and faster.

Smarter Forecasting Starts With Smarter ERP

In retail, forecasting errors are costly. McKinsey reports that demand forecasts are off by an average of 30%, leading to millions in overstock or missed sales. AI-enabled ERP changes that by analysing live sales data, seasonality trends and external signals to improve accuracy. Rather than relying on static reports or manual analysis, AI models within ERP can update forecasts in real time, helping retailers react faster to unexpected spikes or slowdowns.

Pro Tip: AI forecasting works best when it’s paired with quality data inputs. Retailers should focus on streamlining and standardising their data sources before expecting AI to deliver meaningful results.

Also read: Retail’s Planning Gap: What Buyers Need To Know in 2025

Planning, Pricing and Promotion, All Smarter with AI

AI doesn’t stop at forecasting. It’s also being used to improve pricing decisions, markdown strategies and promotional planning. By analysing customer demand patterns, competitor pricing, sell-through rates and stock levels, AI models within ERP can suggest more effective pricing moves, without relying solely on end-of-season clearance. For retailers operating across multiple channels and regions, this is a game changer. AI helps ensure pricing is both competitive and profitable, while promotions are better targeted and timed for impact.

What’s Holding AI Back in ERP?

As promising as AI sounds, there are still hurdles to overcome. Many retailers are dealing with legacy systems and patchy data, which makes it hard for AI tools to deliver reliable insights. If your data is outdated, duplicated or incomplete, AI can only go so far. Getting your data house in order is the first step.

There’s also the challenge of skills. AI isn’t plug-and-play. It requires a blend of technical expertise and operational understanding. That’s why forward-thinking retailers are investing in upskilling their teams and laying the right foundations now, so they’re ready to take full advantage of what AI can offer as the tech continues to evolve.

Where AI in ERP Is Heading in 2025

Despite the hurdles, AI in ERP is moving fast and what we’re seeing now is just the start of a broader shift. From smarter forecasting to pricing automation, the technology is becoming more capable and more embedded across core retail functions. For retail leaders, the goal isn’t to chase every new feature; it’s to prepare your business to take advantage of AI when the time is right. This means focusing on clean data, adaptable systems and building internal confidence in digital change. Even if your ERP doesn’t include AI today, the steps you take now will shape how ready you are when it does.

Want to talk about future-proofing your ERP strategy? We’re here to help you plan with clarity.

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