Retail revolution: AI trends shaping 2024 and beyond

Part 1

The World Economic Forum predicts a significant rise in retail AI investments, reaching US$45 billion by 2032. Although adoption is still in the early stages, global retailers are actively integrating Generation AI (Gen AI) for diverse applications. The reason for such significant investment is that AI can both overcome some of the most common challenges faced by retailers as well as improve overall operational efficiency.

Over the past couple of years, AI applications have increasingly become the primary profit lever for retailers. Highly advanced machine learning algorithms are empowering retailers with the ability to analyse vast amounts of data, gaining insights that were previously difficult.

Among the current top cases for AI in retail are:

• Store Analytics and Insights: provide new levels of convenience and personalization for Brick-and-mortar stores.
• Personalized customer recommendations: use customer data to understand their behaviour and preferences, and provide them with relevant products or services
• Intelligent automation platforms: A combination of AI and automation technologies like robotic process automation (RPA) which together empower rapid end-to-end business process automation and accelerate digital transformation.
• Robotics: used to automate tasks such as inventory management, restocking shelves, assisting customers, and even providing checkout?services.
• Consumer-facing technologies: Metaverse use cases?that can further enhance consumer engagement and operational efficiency.
• Adaptive advertising, promotions, and pricing: businesses need to continuously adjust the prices of their products or?services?based on real-time market demands and consumer behaviour.
• Performance marketing optimization: helping retailers to continually analyse and optimize campaigns, monitoring key metrics of their campaigns by tracking KPIs.
• Next-generation supply chains: Ways to?reduce shrinkage?and enhance loss prevention efforts.

?Executives are now aggressively pursuing strategies that will enable them to improve their decision-making quality and automate much of their decision-making processes. Numerous studies have shown that AI is already turning out to be a game changer where nearly 70%?retailers are reporting an?increase in annual revenue?and a decrease in operating costs attributed to AI adoption.

?2024 marks a pivotal moment for the retail industry, where AI is not just a tool but a key driver behind strategic decision-making.

We will dive deeper into each of the above areas in detail over the next few weeks.