One year into the AI ​​era: Retailers need to scale early-stage investments as customers implement AI into their everyday lives

• Productivity gains and cost savings through generative AI can boost retailers’ already slim margins
  

• Personalized shopping initiatives, such as an AI-powered conversational shopping assistant, can increase a retailer’s revenue by 5-10%
  

• AI tools for content generation, software development and employee support can increase productivity by up to 25-40%
  

NEW YORK

,

May 28, 2024

/PRNewswire/ — Retailers have had access to Generative Artificial Intelligence (Gen AI) tools for over a year now – enough time for almost everyone to see the undeniable power of the new technology. New research from Bain & Company shows how generative AI at scale will rapidly improve productivity, easing margin pressure across the industry with a range of savings.

“From conversational search to personalized apps, next-generation AI is transforming the retail landscape in ways that will be even faster and more disruptive than the smartphone or the Internet,” he said

MikeyVu

, a partner in Bain & Company’s retail practice. “A year into their journey, retailers have achieved some early successes. It will be key for them to scale these use cases, with a focus on return on investment, to keep pace with the changing expectations of customers who are rapidly incorporating generative AI into their everyday shopping experiences. is alive.”

Personalized shopping experiences

One very promising use case focuses on personalizing the customer experience with tools such as an AI-powered conversational shopping assistant, enhanced search, and localized customer recommendations. Bain found that these large-scale use cases have the potential to increase a retailer’s overall revenue by 5-10%. This point is underscored by research from Bain, which found that consumers trust AI for personalized shopping recommendations more than any other use case they were asked about.

Automated generation of marketing content

Retailers have likely already been experimenting with using generative AI to enhance and streamline their marketing efforts – with promising results. Greater rewards now await leadership teams that combine these initiatives into broader efforts to automate marketing generation in areas such as content translation and repurposing, social media, and the creation of dynamic and personalized landing pages. We estimate that this broader family of use cases can deliver a 30-40% increase in marketing productivity.

Overloaded employees

Bain estimates that generative AI improvements that change the way retail workers work on the front lines, in warehouses and at headquarters could increase productivity by up to 25%. This includes automatic inventory checks and restock notifications, as well as search assistants for real-time problem resolution.

The first year of the generative AI era has also prompted retailers to consider its long-term impact. The only worry is that big tech companies will get involved in the initial stages of the buying journey, such as inspiration and selection. Another fear is that they will be sidelined by digital insurgents who are simply quicker to implement generative AI in a compelling way.

To fully leverage the power of AI, retailers must ensure their implementation is tested in the following three areas:

1. Change management.
   
   In the face of all these changes, retailers must remember that they may need to completely redesign their workplaces, both at the front line and at the corporate level, and the improvements made now should also facilitate future evolution.
   

2. Democratization
   
   . To successfully move from experimentation to scaled delivery, retailers must make Gen AI tools available to all of their employees, not just those in the technology department. At the same time, however, they must centralize gene AI capabilities to avoid duplication of work and other inefficiencies.
   

3. Talent.
   
   Because best practices in implementing gen AI often quickly fall out of favor, retailers must help employees continually update their new skills in technology-related roles and across the organization by focusing on upskilling existing employees.

Editor’s note:

For more information or to arrange an interview, please contact:

Katie Ware

Bain & Company, tel. +1 646 562 8107, e-mail: [email protected] .

About Bain & Company

Bain & Company is a global consulting firm that helps the world’s most ambitious changemakers define the future.

In 65 cities in 40 countries, we work with our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition and redefine industries. We complement our aligned, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster and more sustainable results. Our 10-year commitment to investing over

$1 billion

in Pro Bono Services brings our talent, expertise and knowledge to organizations addressing today’s pressing challenges in education, racial equity, social justice, economic development and the environment. We have earned a platinum rating from EcoVadis, the leading platform for assessing environmental, social and ethical performance in global supply chains, placing us in the top 1% of all companies. Since our founding in 1973, we have measured our success by the success of our customers and proudly maintain the highest level of customer support in the industry.

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SOURCE Bain & Company