AI is driving massive change in the retail industry, a trend that will only accelerate as AI-powered technologies are more broadly adopted. Many retailers have been leveraging AI for retail success for some time. For example, Ocado Group uses AI-powered solutions to keep an eye on its supply chain. Beauty retailer Charlotte Tilbury leverages AI in its mobile app to improve user interactions and overall shopping experiences. And now, with Generative AI (GenAI) in the picture, more and more retailers are embracing AI to redefine the way they do business – from streamlining processes and reducing costs to analysing data and much more.
The most exciting GenAI use cases in retail today are aimed at providing personalised shopping experiences and offering valuable insights through chatbots for retail, social integration, and gamification. In fact, 40% of retailers are in the preliminary exploration phase of GenAI, while 21% are already actively investing in implementing AI tools for retail, according to a recent survey by IDC. Take Carrefour, for example, a French-based retailer that is leveraging GenAI to streamline its internal purchasing processes.
GenAI’s role across the retail value chain
While a strategic integration of GenAI can significantly improve the retail value chain and the overall retailer experience, it is crucial to understand how retailers can make the most of it. Fundamentally, the retail value chain is categorised into three funnels: front, mid, and back, which cover the entire customer lifecycle.
Suggested read: Last-mile Delivery: The Power of Data-Driven Planning and Tracking
Addressing challenges for a wholesome retail experience
Adopting GenAI for the retail value chain presents a range of challenges that European merchants must navigate to realise the full potential of retail AI solutions. Data privacy concerns are one of the top concerns, which require retailers to adhere to regulations and security measures to safeguard customer data, which can only be acquired with explicit consent. Ethical considerations regarding potential bias in AI algorithms are another critical concern, prompting retailers to take proactive measures to ensure fairness and transparency, especially taking into consideration the AI Act.
Lastly, the costs associated with implementing GenAI solutions, along with the complexity of integrating them into existing systems and workflows, present more roadblocks for retailers. These challenges can be addressed by partnering with technology and domain experts for careful planning and a commitment to ethical and responsible AI use.
Persistent is a trusted technology partner for many retailers, and we regularly engage with leading brands to apply our market-leading solutions for innovation and excellence. Our consumer technology practice harnesses product engineering expertise to develop software solutions that drive customer engagement and transform the consumer value chain. With specialised skills and investments in GenAI, our solutions are optimised with real-time business analytics.
Persistent’s Smart ‘X’ Practice focuses on intent-driven impact, reshaping the consumer value chain by partnering with hyperscalers and by leveraging cloud, big data, AI, and new user experiences. Through conversational platforms and global catalogues, we empower consumers with GenAI, driving significant business and social impact. Here’s how we’ve helped a Fortune 500 beverage maker elevate sales, save costs, and engage users.
By embracing GenAI, retailers are not merely adapting to change; they are actively driving it, leading to a future characterised by agility, intelligence, and customer-centricity. The journey of GenAI-driven retail innovation is only beginning, and early adopters will have a significant competitive edge in the market. Persistent’s domain and GenAI expertise promise boundless innovation and growth opportunities within the retail industry. Connect with us today to learn more.
Reference
- https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-economic-potential-of-generative-ai-the-next-productivity-frontier#introduction
- https://www.ey.com/en_gl/supply-chain/how-generative-ai-in-supply-chain-can-drive-value
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