71% of Indian retailers to adopt Gen AI for personalised shopping experiences: EY

AI for retailers: Country's retail industry is set for a wide Generation AI (Gen AI) adoption, according to a recent survey conducted by EY. The survey reveals that 71 per cent of retailers are planning to adopt Gen AI within the next 12 months, signalling a widespread recognition of its potential value in the sector.

Traditionally reliant on data for predicting consumer behaviour and managing inventories, the retail industry is now gearing up to leverage Gen AI to gain new insights and improve efficiency across the entire value chain. The survey indicates that 6 per cent of the surveyed audience has already implemented Gen AI, showcasing an early adoption trend.

Hyper-local personalisation

Current investments in AI within the retail sector are estimated at $5 billion, and this figure is expected to soar to $31 billion by 2028. Gen AI, positioned as the next frontier in artificial intelligence, can change the retail experience by tapping into vast repositories of unstructured data.

The EY report forecasts that by 2025, Gen AI could potentially boost the retail sector's profitability by 20 per cent. AI not only aims to reduce overhead costs but also has the potential to significantly increase sales through personalised consumer experiences. The report highlights that even local retailers can offer 'hyper-local' personalised shopping experiences by integrating Gen AI tools in their operations. 

Privacy and ethical challenges 

The EY report also sheds light on challenges and dilemmas faced by the industry, particularly concerning privacy and ethics. As Gen AI offers valuable insights for retailers, concerns about privacy emerge, especially with location tracking for real-time promotions. 

The survey indicates that 80 per cent of organisations express low-to-moderate readiness for Gen AI adoption, citing unclear use cases and a skills gap. Currently, 82 per cent prefer partnerships with external tech providers for Gen AI implementation.

Angshuman Bhattacharya, National Leader of Consumer Product and Retail Sector, EY India, underlined the transformative nature of Gen AI, stating, "Gen AI is not just a technological leap; it's a seismic shift in how retailers adapt, innovate, and enhance customer experiences. With 71 per cent gearing up for adoption, it's clear that the retail landscape is on the brink of a transformative era."

However, Bhattacharya also highlighted the importance of addressing privacy, ethics, and readiness as crucial considerations in navigating this AI revolution.