According to a recent Syndigo report, nine out of ten retailers already use generative AI to enhance customer experiences. The most common applications include personalisation, search and discovery, and marketing and promotions, with 85% of retailers employing AI for customer service and 83% for marketing efforts.
However, the integration of generative AI is still a work in progress for many. Although 59% of retailers have implemented AI in some operational areas, 32% are still in the early stages. Moreover, only 9% consider it a critical part of their business. Despite this, 98% of respondents believe AI has significantly improved operational efficiency, while 95% agree that its benefits justify the cost.
“As these solutions advance, they promise a more well-rounded customer experience with shoppers able to browse or get immediate access to a customer service ‘rep’ at their leisure,” said Benny Blum, senior vice president, product at Syndigo.
In addition, retailers are exploring AI’s potential in enhancing eCommerce flexibility and enabling interactive chat experiences to enhance site search, with 59% and 58% of respondents, respectively, focusing on these innovations. Still, the technology is not without its challenges, 81% of retailers using AI for search and discovery report only moderate satisfaction with their current capabilities.
Looking ahead, 34% of retailers plan to increase their generative AI investment over the next five years, while 71% are concerned about potential customer backlash, especially regarding privacy issues. Almost half of respondents (47%) highlight the importance of adhering to privacy standards, and 46% stress validating AI-generated content for accuracy.
Generative AI can provide more accurate demand forecasting, streamline inventory management, and improve operational efficiency. While 53% of retailers believe AI will have a moderate impact on the industry’s future, 39% anticipate it will be significant or critical, shaping the way businesses engage with customers and manage their operations.