Retailers are looking to artificial intelligence to help them increase revenues and profitability in the long run, but for the moment they remain sceptical about the hype surrounding the industry, a new study has found.
Oxford Economics surveyed 324 executives across seven US retail subsectors for Synchrony Financial for its Shopping for AI study and found that most were in the early stages of AI adoption, although momentum was building fast. The study looks at the US market where the use of AI is likely to be more advanced, but the results should be of interest in the UK, where machine-learning is already in use by retailers from Ocado – for managing customer communications – to Very and Amazon – which use chatbots in their eecommerce apps to deal with account queries.
Nearly three-quarters of respondents said that AI would be a competitive necessity for their company in the next five years. That figure rises to 90% of early adopters. Nearly half said AI would transform their businesses. However just 13% agree or strongly agree that AI currently lives up to the hype – and early adopters are even less likely to say that the reality matches the marketing.
Asked how far advanced they were in implementing different AI tools, 41% said they had implemented chatbots or virtual agents either in some parts of their business, broadly across the business or that they were well-integrated into operations.
Some 40% said they were using robotic process automation in one of these three stages of implementation, while 36% were using machine learning or predictive analytics.
Ecommerce and multichannel retailers believe that AI will improve the customer experience, through personalising marketing campaigns or automating inventory and supply chain logistics. Large companies are in the lead. Some 55% of retailers surveyed said that AI had provided substantial or transformative value in how quickly customer complaints were dealt with. More than half said they’d seen revenues grow as a result of their use of AI. Two-thirds said they expected AI to make their organisation more profitable within three years.
Matthew Reynolds, one of the research leads at Oxford Economics, said: “Retailers are counting on AI to remake a sector already facing meaningful disruption. 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.”