A new study by digital transformation and consulting firm Capgemini has found that artificial intelligence (AI) provides a US$300 billion opportunity for retail firms. Over 71% of surveyed firms said the technology is also creating jobs.
The study, Retail superstars: How unleashing AI across functions offers a multi-billion dollar opportunity, looked at 400 global retailers that are implementing AI at different stages, representing 23% of the global retail market by revenue. By comparing data from 2018 to that of 2017, the study demonstrates how far AI has come in terms of returns and its value if retailers prioritise less complex deployments and diversify their focus.
The study finds that 28% of retailers are deploying AI, a significant increase from 2017 (17%) and 2016 (4%). AI is also creating jobs, with 68% of those jobs at a senior level. 75% of participants reported that AI had not replaced any of their jobs, and any that had experienced job cuts numbered them at 25 or less.
The data also showed that AI has influenced customer complaints, with 98% of respondents expecting customer complaints to reduce by 15% and 99% expecting AI to increase sales 15%. This was markedly different from 2017 where respondents were unsure of the effects of AI.
The Capgemini Research Institute also analysed 43 working use cases to predict the future growth of AI, finding that retailers can save over US$300 billion by scaling deployments across the entire chain. However, only 1% of participants were seen to be using multi-site or full-scale implementation.
The results also showed that the lack of scalability is caused by retailers focusing on more complex projects with higher returns. The current driving forces behind AI deployments are cost (62%) and return on investment (ROI) (59%), not customer usability: with customer experience driving only 10% of deployments and customer pain points only 7%.
As the realities of AI have revealed themselves, companies in 2018 have more realistic expectations about their preparedness for AI, with only 53% claiming that are ready compared to 78% in 2017. Those claiming to have a roadmap for AI deployment have dropped from 81% in 2017 to just 36% in 2018.
“For global retailers, it appears reality has kicked in regarding AI, both in terms of what the technology can achieve and what they need to do to get there,” said Kees Jacobs, vice president of Global Consumer Products and Retail Sector at Capgemini. “Of course, deploying and scaling will be the next big objective, but retailers should be wary not to chase ROI figures without also considering the customer experience.
Our research shows a clear imbalance of organisations prioritising cost, data and ROI when deploying AI, with only a small minority considering the customer pain points also. These two factors need to be given equal weighting if long-term AI growth, with all of the benefits it brings, is to be achieved.”
Download a copy of the report.
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