Retailers investing in AI, ‘but wary of hype’
Written by Peter Walker
New research has revealed that retail executives see artificial intelligence (AI) as a competitive necessity, but remain sceptical about whether practical applications live up to the hype.
Oxford Economics, in collaboration with Synchrony Financial, surveyed 324 executives across seven US retail sub-sectors in late 2018, finding that nearly three quarters of respondents reckon AI will be a competitive necessity for their company in the next five years – a figure that rises to 90 per cent of early adopters.
Nearly half of respondents also said the application of AI will have a transformative impact on their business, however just 13 per cent agreed or strongly agreed that current AI applications live up to the hype, with early adopters even less likely to say that reality matches marketing.
The report suggested that retail executives understand AI as an enabler of multiple technologies with discrete applications, including machine learning and predictive analytics, chatbots and intelligent agents, and Robotic Process Automation (RPA).
In terms of the maturity of implementation of AI tools in retail businesses, 41 per cent of respondents said chatbots or virtual agents were “implemented in some parts of their business”, “implemented broadly” or “well-integrated into operations”.
Meanwhile, 40 per cent said that RPA was in one of these three stages of implementation, while 36 per cent said machine learning and predictive analytics was in one of these stages of implementation.
More than half (55 per cent) of the retailers surveyed said AI has provided substantial or transformative value on speed of customer complaint resolution, and over half reported value from their AI initiatives in the form of revenue growth. The impact on profitability is not large to date, but two-thirds expected AI to make their organisation more profitable in three years.
“Retailers are counting on AI to remake a sector already facing meaningful disruption,” said Matthew Reynolds, one of the research leads at Oxford Economics. “There are significant challenges for leading companies - a shortage of relevant skills, for smaller retailers a budget crunch, and for everyone questions about the technology’s maturity - but this is happening, and it’s happening now.”