AI is changing every aspect of retail. From better customer engagements to improved operational decisions and streamlined supply chains, the emerging technology is changing the retail landscape.
Most retailers understand this. But very few have actually started their AI journeys.
According to Microsoft Asia’s “Future Ready Business: Assessing Asia-Pacific’s Retail Sector with AI” study, which was done together with IDC Asia Pacific, 71% of retail decision-makers believe AI is instrumental to their competitiveness over the next three years.
However, only 33% have embarked on their AI journeys. The low adoption numbers put APAC retail behind other industry sectors.
While retailers in the region prioritize on transforming the customer experience and leveraging data for operational efficiency and insights, many currently lack the infrastructure and capabilities to successfully implement AI to achieve these and grow their business.
“Facilitating investments in AI-enabling capabilities and infrastructure will be necessary for retailers to unlock the full potential of their operations and employees - and ultimately, future-proof their businesses," says Stephanie Krishnan, Retail Insights research director at IDC Asia Pacific.
Part of the problem is talent. Retailers feel that they need to acquire new talent, which is expensive and difficult to find. However, the study noted that they may not be appreciating their current employees’ ability to learn.
Retailers who have gone ahead with their AI journeys are beginning to reap dividends.
The study showed that these AI-ready companies are seeing 16-19% gains in customer engagement, business intelligence, profit margins, competitiveness, and innovation.
By 2021, the retail companies in the region expect AI to drive further 37-44% improvements in these areas.
"To stay competitive, a shift to intelligent retail is required to add ease, convenience, customization, and automation – across business processes and operations, customer experiences, and the very products and services offered," says Raj Raguneethan, regional business lead for Retail and Consumer Goods at Microsoft Asia.
“This can be done by turning to cloud and AI tools as the underlying, connective tissue for digitization and business transformation,” he adds.
Photo credit: iStockphoto/Kinwun