Retailers have the opportunity to scale and expand the scope of their existing AI deployments however, research shows only 1 per cent of retailers have achieved this.
A recent Capgemini study, Retail superstars: How unleashing AI across functions offers a multi-billion dollar opportunity calculated AI represents a US$300 billion opportunity for retailers if they can scale it across their value chain.
The study showed 28 per cent of retailers are deploying AI today, up from 17 per cent 2017 and just 4 per cent in 2016. However, when reviewing all the active AI deployments, Capgemini found just 1 per cent were working on either multi-site or full-scale implementation.
This lack of scalability is likely caused by retailers focusing on more complex, higher-return projects.
The report showed retailers deploying AI were eight times more likely to be working on high-complexity projects than ‘quick win’ projects that are easier to scale.
The driving forces behind current AI implementations are cost at 62 per cent and ROI at 59 per cent, while customer experience (10 per cent) and known customer pain points (7 per cent) are significantly lower priorities.
From the report, 71 per cent of retailers claim AI creates job with 68 per cent of the jobs at senior level.
Three-quarters of retailers say AI has not replaced any jobs within their organisation.
AI has created lower customer complaints and higher sales with 98 per cent of respondents using AI finding customer complaints reduced by up to 15 per cent. When it came to sales 99 per cent AI to increase sales by 15 per cent.
Kees Jacobs, VP global consumer products and retail sector at Capgemini said, “For global retailers, it appears reality has kicked in regarding AI, both in terms of 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.”
AI for operations
The study also showed 26 per cent of AI use cases today are operations focused but the most profitable in terms of cost restuns.
Standout examples included using AI for procurement tasks (averaging 7.9 per cent ROI), applying image detection led algorithms for detecting in-store pilferage (7.9 per cent) and optimising supply chain route plans (7.6 per cent).
Retailers are being realistic on their level of AI preparedness, those claiming that they have the skills needed to implement AI have now dropped from 78 per cent in 2017 to 53 per cent today.
More than eight out of ten retailers in 2017 were confident that their data ecosystem for implementing AI was prepared, and today this figure has dropped to 55 per cent.