Dive Brief:
- To enhance the customer experience, these executives say they will invest in buy now, pay later programs, modernized storefronts, same-day delivery services, and hiring more employees, among other things. The executives surveyed represent retailers and CPG firms generating between $25 million and $300 million in revenue.
- While half of the survey respondents expect their sales to remain the same in 2024 compared to last year, nearly 40% anticipate their sales to grow this year.
AI Adoption in Retail: Retailers Plan to Utilize Artificial Intelligence for Marketing Strategy and Financial Projections, Reveals Survey
Nearly six out of ten retail and consumer packaged goods executives are planning to invest in artificial intelligence (AI) for marketing, financial forecasting, customer service, user experience, and supply chain management, according to a survey commissioned by Carl Marks Advisors.
Dive Insight:
- AI continues to be a priority for retailers as they seek to set industry best practices. In November, the National Retail Federation introduced its four principles for AI usage in retail, including enhancing customer engagement and trust, implementing governance and risk management, focusing on workforce applications, and establishing accountability with business partners.
- Major online retailers are already adopting the technology. For example, eBay unveiled its "magical listing" tool in September, which uses AI to summarize product details, and Amazon launched a tool to assist merchants with creating product descriptions using AI.
- Brick-and-mortar retailers have also delved deeper into AI, with Walmart debuting My Assistant, a generative AI-powered tool for non-store staffers in the U.S., and announcing a pilot for an AI and augmented reality-driven tool that helps customers design rooms.
- However, research suggests that retailers' focus on same-day delivery may be misplaced. A report from Forrester found that free shipping is the most critical factor for U.S. online shoppers when choosing where to shop online, while only half of survey respondents said that same-day delivery has an influence on their selection.
- "With inflation abating and interest rates leveling off, 2024 offers an exciting opportunity for retailers willing to take risks and embrace innovation. Retailers who are prepared to reevaluate their business models and invest in integrated omnichannel experiences should be optimistic about the coming year," said Howard Meitiner, managing director at Carl Marks Advisors.
As retailers look to AI for operational efficiency, product innovation, improved customer service, and personalization, it's clear that the technology is becoming essential for success in the industry. It remains to be seen how retailers will balance these investments with other priorities, such as supply chain management and customer acquisition. But with the ever-evolving landscape of retail, it's certain that AI will continue to play a critical role in shaping the future of the industry.
According to available research from 2024-2025 surveys, key areas where AI investments are expected to have a significant impact on retail and consumer packaged goods companies include operational efficiency automation, product/service innovation, advanced pattern detection, customer service automation, and AI-powered personalization.
- By 2024, retail and consumer packaged goods companies are expected to invest in AI for operational efficiency automation, product/service innovation, advanced pattern detection, customer service automation, and AI-powered personalization, as per research from surveys.
- The survey commissioned by Carl Marks Advisors highlights that AI is a priority for retailers, aiming to set industry best practices, particularly in financial forecasting, customer service, user experience, and supply chain management.
- In 2024, nearly four out of ten retailers anticipate their sales to grow, while half predict their sales will remain stable compared to the previous year, according to the same survey.
- To augment the customer experience, retailers plan to invest in buy now, pay later programs, modernized storefronts, same-day delivery services, and hiring additional employees, as per the survey.
- Retail leaders should reevaluate their business models and prepare to invest in integrated omnichannel experiences to optimize their prospects in 2024, according to Howard Meitiner, managing director at Carl Marks Advisors.
- In the realm of technology, major online retailers like eBay and Amazon have already adopted AI, while brick-and-mortar retailers like Walmart have showcased AI-powered tools for staff and customers.
- Research findings suggest that retailers' focus on same-day delivery may be overemphasized, as free shipping emerges as the most crucial factor for online shoppers in the United States, while only half find same-day delivery influential in their shopping decisions.
