Nearly half (47 per cent) of UK retailers believe that artificial intelligence (AI) will create more meaningful relationships with their customers, despite the fact that just one in five consumers trust companies to responsibly handle their data, according to new research.

A survey of 2,047 households and 33 retail and consumer brands companies conducted by international law firm CMS and Retail Economics found that while retailers are embracing the potential of AI to transform supply chains and customer relations, consumers remain wary of the future of automated retail.

The survey found that just one in six consumers feel comfortable with the idea of AI powered in-home delivery, and one in five expressed concerns over data handling and protection.

As a result of growing reticence amongst consumers around data, two thirds of organisations said they would be looking to create roles responsible for managing data ethics.

A skills gap also needs to be filled, with nearly 60 per cent of organisations saying they lacked the specialised skills required to roll out new AI technology, with three quarters saying they would plug the gap through external suppliers and 38 per cent saying they would look to develop these skills in house.

Age was found to be a key factor in readiness to embrace AI amongst consumers, with nearly 40 per cent of 18-24 year olds expressing high levels of comfort with chatbots, compared to just 24 per cent of over-85s who held this view.

However, when it comes AI-assisted shopping, two thirds of consumers said they would be more likely to visit a physical store if they were able to check real-time availability of items, suggesting that consumer attitudes to AI vary depending on the type of technology being used.

Retailers were found to have a more positive outlook all round, with 80 per cent saying AI has the potential to increase customer loyalty through personalisation, 63 per cent saying it could help to optimise supply chains and 53 per cent saying it could reduce overall costs.

Key retail sectors that could stand to benefit from investment in AI included sales and marketing (66 per cent), warehouse, distribution and logistics (53 per cent) and buying and merchandise (47 per cent).

CMS partner Matthew Bennett said: “Perhaps having learnt the lesson of failing to adapt quickly to emerging internet technology the first time around, many retailers and brands have been early adopters of AI relative to other industries.

“Some fascinating themes arise, notably around trust and ethics, a generational divide amongst consumers, AI skills shortages within organisations, and significant legal and regulatory hurdles.”

Richard Lim, chief executive of Retail Economics, said: “Technology is at the very heart of disruption in the retail industry, driving a period of unprecedented change, seismic shifts within the consumer and retail industries are being exacerbated by AI integration at every step of the customer journey.

“The next decade will witness digitally-fuelled change at unprecedented pace, the proliferation of AI-related technologies, applications and sentiments from both a consumer and retailer/brand perspective is likely to lead to a retail world that will be almost unrecognisable within a generation.”

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