EXCLUSIVE: The biggest AI benefits for retailers are…
A new survey released exclusively to Chain Store Age reveals how retailers are obtaining value from artificial intelligence (AI).
Almost eight-in-10 (78%) retail executives surveyed as part of a February 2024 survey of 1,420 IT decision-makers across industries sponsored by Rackspace Technology and Amazon Web Services plan to invest from $500,000 to $5 million in AI this year. For many of these respondents, this will double their IT budgets from the past year.
Roughly half (49%) of retail respondents credit AI with providing “substantial” benefits. Of these respondents, 51% said AI benefits include innovation, 49% cited reduced risk, 45% said increasing sales, and 43% credited AI with personalizing marketing campaigns.
AI Barriers for Retailers
The survey also asked retail respondents about the biggest barriers to obtaining actionable insights from AI. Top responses included:
- Accuracy (answers always need human interpretation) (73%).
- Cybersecurity (57%).
- Safety (53%)
- Data security (52%).
- Data privacy (51%).
Sources of AI strategy
The AI strategy at retail companies came from the following divisions (more than one answer allowed):
- IT (63%).
- Functional departments - marketing, HR, finance, sales (45%).
- Customer service (42%).
- Engineering/product development (42%).
- Operations (38%).
Other findings
- Speed/efficiency, customer understanding and data insights were the top reasons retail respondents gave for using AI/ML. Retail respondents said AI/ML is being used primarily for customer experience and to innovate product design.
- Cost reduction, employee efficiency and customer experience are driving AI/ML adoption among retail respondents, and the leading KPIs being used to measure the success of AI/ML are revenue growth, cost savings and customer satisfaction.
- Despite any budget cuts, 84% of retail respondents said they have attempted to recruit people with AI/ML skills in the past year. Half identified the skills necessary for AI adoption as being critical thought and creativity.
[Read more: CSA Exclusive: Retailers see AI-driven need for technology upgrade]
"At many companies, IT departments went from being a necessary evil to getting whatever they want now that AI and the integration of data have caused the fastest transformation in technology history as compared to the development of servers/web tech, cloud, e-commerce and mobile which took years to be adopted," said Rackspace Technology chief technology evangelist Jeff DeVerter in an email to Chain Store Age.