A Fresh Take on Retail's AI Future
AI Adoption in Retail: Retailers Intend to Utilize Artificial Intelligence for Marketing and Financial Projections, According to a Poll
Wanna know what's hot in retail these days? AI, baby! According to a survey backed by Carl Marks Advisors, approximately 60% of retail and consumer goods execs are ready to drop some dough on AI tools for marketing, financial forecasting, customer service, and supply chain management.
So, what exactly are these high-flying retailers planning to spend their hard-earned cash on? Well, it seems they've got their eyes on enhancing the customer experience. Here's the lowdown:
- Pay Later, Play Later: Nearly 37% of execs are thinking about implementing buy now, pay later programs.
- Modern Storefronts: Roughly 36.4% are eyeing modernized storefronts to attract those whelps who fancy the latest, greatest shopping experiences.
- Same-Day Delivery: More than one-third (35.6%) plan to offer same-day delivery services, because who doesn't love instant gratification, right?
- Employee Hiring: 34.8% of these sharp cookie execs are considering beefing up their workforce.
- Automated Services: Approximately 29.6% are set to deck out their stores with automated goodies, like self-checkout counters and the like.
Now, it's essential to remember that the survey covers retailers and CPG firms generating between $25 million and $300 million in revenue.
Now, here's the juicy part: while about half of the survey respondents expect their sales to stay the same in 2024, nearly 40% predict sales growth.
But wait, there's more! The good folks over at Carl Marks Advisors' survey aren't the only ones taking notice. In November, the National Retail Federation launched its AI standards for retail, focusing on areas like customer engagement, governance, workforce applications, and business partner accountability.
Speaking of major retailers, they've been making some moves too. For instance, eBay recently unveiled its "magical listing" tool, which uses AI to summarize product details, while Amazon is helping merchants with AI-assisted product descriptions. Walmart even debuted a generative AI-powered tool called "My Assistant" for non-store staffers and announced a pilot for an AI-driven, AR-infused tool to help customers design their rooms.
However, it seems retailers may be placing too much emphasis on same-day delivery. According to a December report from Forrester, free shipping is the most critical factor for U.S. online shoppers, while only about half of survey respondents reported that same-day delivery impacts their decision when selecting a retailer.
Howard Meitiner, managing director at Carl Marks Advisors, shares his optimistic views on the industry: "With inflation dropping and interest rates stabilizing, 2024 presents an exciting opportunity for retailers who dare to embrace unconventional thinking and innovation. Retailers who are willing to reassess their business model and invest in omnichannel experiences that seamlessly weave online and offline touchpoints should be positively cock-a-hoop about the upcoming year."
Fun Facts:
- In the world of AI, China is breathing down North America's neck when it comes to AI adoption, showing a massive 27 percentage point year-over-year increase in organizational AI use. Europe follows closely, indicating an intensifying global competition in retail/CPG AI solutions.
- AI adoption in service operations, marketing/sales, and supply chain management is delivering tangible benefits for organizations, including cost savings for nearly half of those adopting AI and revenue growth in marketing/sales and supply chain management for around 70% and 60% of those adopters, respectively.
- In the retail and consumer goods sector, approximately 60% of executives are planning to invest in AI tools for various purposes, such as marketing, financial forecasting, customer service, and supply chain management.
- The executives are mainly focusing on enhancing the customer experience, with 37% considering implementing buy now, pay later programs, 36.4% targeting modernized storefronts, and 35.6% planning to offer same-day delivery services.
- The survey covered retailers and CPG firms generating between $25 million and $300 million in revenue, and nearly 40% of these executives predict sales growth in 2024.
- The National Retail Federation launched its AI standards in November, focusing on areas like customer engagement, governance, workforce applications, and business partner accountability.
- Major retailers like eBay, Amazon, and Walmart have been introducing AI-related tools in their operations, such as automated services, AI-powered product summaries, generative AI for non-store staff, and AR-infused tools for customers.
- According to a December report from Forrester, free shipping remains the most important factor for U.S. online shoppers, while the impact of same-day delivery on their decision-making is only about half as significant.
- Howard Meitiner, managing director at Carl Marks Advisors, believes that the dropping inflation and stabilizing interest rates in 2024 present an exciting opportunity for retailers who embrace unconventional thinking and innovation, particularly those willing to reassess their business model and invest in omnichannel experiences.
