The numbers are in, and generative artificial intelligence (AI) is poised to have a major impact on retail.
Generative AI will have a financial impact of $9.2 trillion through 2029 on retail, according to a new forecast from research analyst firm IHL Group. Generative AI, which is based on machine learning (ML), can create new content and ideas, including conversations, stories, images, videos, and music.
While currently representing only 9% of the overall retail industry financial impact in 2023, IHL predicts generative AI will account for 78% of the total financial impact by 2029 and a total of $4.4 trillion during that year.
Key data points from the IHL generative AI forecast also include the following:
The benefits of generative AI are projected to stem from three primary areas: increased sales (51%), improved gross margins (20%), and lowered selling and administrative (S&A) costs (29%).
Through 2029, IHL’s forecast predicts that 47% of the benefits of cumulative impact of AI will come from traditional AI/ML technologies in closed systems, 48% from generative AI functions, and 5% from artificial general intelligence tools which will become available later in the decade.
Retailers can expect to achieve between five to 100 times greater efficiency using generative AI technologies, particularly in sales and general administrative tasks. Tasks that have traditionally taken hours or even days to complete can now be accomplished in a matter of minutes, enabling retailers to streamline their operations, drive productivity, and deliver enhanced customer service.
“The most significant improvements will come when generative AI is added on top of the AI/ML tools already being developed that rely on clean, accurate, and properly tagged data.,” said Greg Buzek, president of IHL Group. “The improvements here will be exponential for retailers. This insight underscores the importance of building upon existing AI and machine learning (ML) capabilities, harnessing the power of generative AI to unlock exponential growth and improve inefficiencies.”
Survey: Consumers have doubts on generative AI chatbots
A recent survey from AI platform InRule reveals general consumer distrust of generative AI technology used in customer service chatbots:
59% of all respondents distrust generative chatbot technology.
47% of all respondents prefer humans over chatbots like ChatGPT during customer experience.
Even as cutting-edge technology like ChatGPT continues to be released to improve experiences, 70% of respondents will still prefer to interact with and keep a human in the loop.