Customers might hold inflated expectations regarding the level of AI integration in retail, as it appears retailers are farther behind in AI adoption compared to what is commonly perceived.
In the ever-evolving world of retail, Artificial Intelligence (AI) is making its mark, albeit selectively. According to a recent study by IFH Foerderer, more than one-third of companies in Germany are currently employing AI, primarily in customer service and marketing to enhance sales.
The study, titled 'Transformation Meets Innovation: Smart Retail and AI in Retail', reveals that the comprehensive use of AI in retail can be found in Inventory Management and Logistics, with 53 percent of retailers leveraging its capabilities. However, direct application in sales is limited, with only about 5 percent of companies currently using AI in this capacity.
One notable example of AI application is LOXXESS AG, which uses AI for tailored logistic outsourcing solutions.
Interestingly, the acceptance of AI varies depending on its field of application. Consumers expect AI to be used in Marketing & Advertising (65 percent), Consultation & Customer Service (62 percent), and Fraud Detection and Security (60 percent). There is, however, greater skepticism about live chats or personally related processes, with many consumers preferring human contact in these areas.
The study also highlights that transparency is crucial, particularly for tech-savvy, younger target groups in the retail industry. At least two-thirds of consumers want transparent communication about AI use, including internal processes such as Process Optimization, Personnel, or Logistics.
As the retail industry navigates the ongoing economic crisis in Germany, half of the 1,000 consumers surveyed feel strongly insecure. This insecurity, however, has not led to a complete rejection of AI. Only five percent of consumers surveyed believe that no AI is used in retail at all.
The potential for AI in retail is significant, offering opportunities for streamlined operations and personalized shopping experiences. Retailers are currently testing or preparing initial steps in other areas, indicating a growing acceptance and adoption of AI.
Professor Werner Reinartz of University of Cologne, Director of IFH Foerderer, and Co-Author of the study, states that many retailers do not expect disruptive changes from AI in the long term. This suggests a gradual integration of AI into the retail sector, rather than a revolution.
In conclusion, while AI is making strides in the retail industry, its implementation is selective and strategic. Transparency and consumer preferences play a crucial role in shaping its future, and the retail sector must be willing to invest and openly discuss its use to achieve personalized shopping experiences.
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