A study from the Capgemini Research Institute has dispelled some rubbish surrounding AI’s value to retail businesses and shown a path to tangible growth opportunities.
Capgemini beancounters calculate a $300 billion+ opportunity for those retail companies that can scale and expand the scope of their existing deployments.
Things are never as good as that, and the report found that one percent of cases by retailers had managed this level of deployment so far.
The study said: “Retail Superstars: How unleashing AI across functions offers a multi-billion dollar opportunity”, looked at 400 global retailers that are implementing AI use cases at different stages of maturity – a group that represents 23 percent of the global retail market by revenue. The study further included an extensive analysis of public data from the world’s largest 250 retailers, by revenue.
Comparing this data to 2017 equivalents, it delivers a series of reality checks that not only show how far AI has come regarding concrete returns, but how much value it can deliver if retailers begin to prioritise less complex deployments and diversify their focus.
More than a quarter of retailers are deploying AI up from in 2017 (17 per cent), and a seven-fold increase from 2016 (four percent).
So far it has not caused many jobs losses. About 71 percent of retailers say AI is creating jobs today, with over two-thirds of the jobs being at a senior level (coordinator level or above). Meanwhile, 75 percent declared that AI had not replaced any jobs in their organisation so far. Those who did say jobs have been cut put the number at 25 or lower.
Retailers are now remarkably aligned on the impact AI is likely to have on customer relations and sales:
While expectations have declined from 2017, the report finds that 98 per cent of respondents using AI in customer-facing functions expect the number of customer complaints to reduce by up to 15 percent, while 99 per cent expect AI to increase sales by up to 15 percent. This marks a significant change from 2017, where respondents gave widely contrasting expectations from zero to more than 15 percent, to “don’t know”. No respondents reported that they could not quantify AI’s benefit.
Kees Jacobs, Vice President, Global Consumer Products and Retail Sector at Capgemini said, “For global retailers, it appears reality has kicked in regarding AI, both regarding what the technology can achieve and what they need to do to get there. 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.”
