The retail industry in India is poised for a transformative era with the introduction of generative artificial intelligence (Gen AI), according to a recent survey conducted by EY. Traditionally relying on data to predict consumer behavior and manage inventories, retailers are now ready to embrace Gen AI to gain insights and enhance operational efficiency.
The survey report revealed that 6% of organizations in the Indian retail sector have already implemented Gen AI, and an impressive 71% plan to adopt it within the next 12 months, underscoring the perceived value of this technology in the industry.
Investments in AI in the retail sector currently stand at $5 billion, but this figure is predicted to skyrocket to $31 billion by 2028. Of the survey respondents, a staggering 88% believe that Gen AI will have a medium to high impact on their retail business.
The greatest impact of Gen AI is expected to be in areas such as customer engagement, unstructured data intelligence, content and creativity, and intelligent process automation. Among the respondents, 76% anticipate that customer experience will be the domain most affected by Gen AI, but the industry is also exploring its impact on product innovation (65%), cost reduction (54%), and the entire value chain (50%).
The report suggests that Gen AI could potentially boost the retail sector’s profitability by 20% by 2025. This technology not only reduces operational overheads but also has the potential to increase sales through personalized consumer experiences. Additionally, local retailers can leverage Gen AI tools to provide hyper-localized personalized shopping experiences.
While Gen AI holds great promise for retailers, the industry also faces ethical considerations and challenges. Privacy concerns arise with the use of location tracking to deliver real-time promotions, necessitating transparency in data usage.
Angshuman Bhattacharya, the national leader of the consumer product and retail sector at EY India, emphasized the need for responsible leadership in navigating this AI revolution. It’s clear that the retail landscape is on the brink of a transformative era. But as we ride this wave, privacy, ethics, and readiness take center stage. Board, CEO, and CIO leadership must navigate this AI revolution, balancing innovation with responsibility to craft a future where technology not only drives profits but also enriches our shopping experiences with integrity and transparency, he said.
The survey also highlighted that 80% of organizations expressed low-to-moderate readiness for implementing Gen AI, citing both unclear use cases and a skills gap. Currently, 82% of these organizations prefer to partner with external tech providers for their Gen AI implementation.
In conclusion, the retail industry in India is gearing up for a significant transformation with the adoption of generative artificial intelligence. While promising to enhance efficiency and provide valuable insights for retailers, the industry must also address ethical concerns and challenges associated with this innovative technology. With the right leadership and readiness, Gen AI holds the potential to revolutionize the retail landscape, providing personalized experiences and driving profitability for businesses in the sector.
*Note: The content generated by OpenAI has been modified slightly for coherence and readability.*
