A survey of 413 retail business executives finds 41% of retailers are already using various forms of artificial intelligence (AI), with over half of those respondents (54%) having identified six or more use cases.
Conducted by NVIDIA, the survey finds another 35% of respondents have launched pilot AI projects.
Among respondents that have already adopted AI, 69% said it has increased annual revenue, with 15% seeing a more than 15% increase. Nearly three quarters (72%) report they also saw a decrease in operating costs, with 23% seeing a decrease of more than 15%, the survey finds.
AI is being most widely applied to store analytics (53%), followed closely by personalized customer recommendations (47%) and adaptive advertising, promotions and pricing (40%).
Not surprisingly, a full 98% plan to increase their investments in generative AI over the next 18 months, but more than three quarters (77%) said those investments would amount to less than $5 million. Less than half (46%) said generative AI will provide them with a strategic differentiation, but 86% said they will rely on it to improve customer experience, with 68% also planning to transform customer experience and automate content creation.
Overall, nearly two-thirds of respondents (64%) said they also plan to increase their investments in AI infrastructure over the next 18 months, with 34% planning to increase spending by 15% or more, the survey finds. Thus far, however, over two thirds (68%) have invested less than $5 million in AI infrastructure.
There is clearly a segment of the retail sector that is adopting AI more aggressively than the rest of the industry, says Cynthia Countouris, director of product marketing for retail, consumer packaged goods (CPG) and quick service restaurants (QSR) for NVIDIA.
Historically, most retailers have tended to be laggards when it comes to adopting emerging technologies, but in the case of AI some retailers are becoming early adopters, notes Countouris. “There is a segment that is very aggressive,” she says.
Ultimately, AI should make it easier for retailers to achieve omnichannel marketing goals that have been challenging for them to attain. Most retailers continue to engage customers via multiple channels, but few can holistically manage those interactions, says Countouris. Advances in generative AI that, for example, enable summarizations should make it easier for customer service representatives to maintain context as they move between communications channels. In fact, by this time next year retailers should expect to see customers voting with their dollars for one company or another based on the customer experience enabled by AI.
It’s not clear how fast retailers are adopting AI compared to other vertical industry segments, but as the pace at which AI advances continues to accelerate, AI is rapidly becoming table stakes. There may be a few instances where AI is providing a truly sustainable competitive advantage but, in general, organizations that don’t make the appropriate level of investment required will soon be left behind. The challenge, as always, will be determining which AI use cases represent low-hanging fruit that everyone will pick, versus a capability uniquely enabled by the data only that company has.
