Two-thirds of Retailers Set to Implement GenAI in 2024

Approximately 65% of retailers plan to implement generative AI (GenAI) in a consumer-facing capacity within the next six to 12 months, according to a survey by First Insight shared exclusively with EMARKETER. An additional 29% intend to do so within the next one to two years, highlighting a widespread recognition of AI's potential to revolutionize the retail sector.

The enthusiasm for implementing GenAI into business operations extends beyond mere interest, as retail executives and management teams alike are actively exploring its various applications. CEOs are particularly keen on leveraging this technology for design purposes, recognizing its potential to drive innovation and creativity in product development, according to First Insight. 

Meanwhile, management teams are enthusiastic about the technology's ability to enhance predictive analytics, enabling retailers to make data-driven decisions and anticipate market trends with greater accuracy, which would later allow them to decrease costs and overproduction.  

However, despite the optimism surrounding GenAI, there exists a notable discrepancy between executive leadership and frontline employees regarding its implementation. While CEOs prioritize GenAI for its potential to drive strategic initiatives, management teams are more concerned with the practical challenges of integration and adoption. This disconnect underscores the importance of aligning organizational goals and priorities to maximize the benefits of GenAI effectively.

In Mexico, the adoption of Generative AI (GenAI) among businesses is already well underway, with over 50% of companies utilizing AI tools to automate tasks and streamline processes. According to a report by web hosting service Neubox, businesses that have embraced GenAI cite increased efficiency and productivity as key benefits. However, a significant portion of businesses that have not yet adopted AI tools cite a lack of understanding and uncertainty about integration as barriers to adoption.

“GenAI can serve as a key differentiator for retailers, providing their customers with a unique and memorable experience that embodies their brand identity,” said Shelley Bransten, Corporate Vice President, Global Retail, Consumer Goods and Gaming Industries, Microsoft. “We are committed to democratizing the concierge-like experience across the shopping journey.” 

The integration of GenAI has transformed the retail experience, empowering businesses to deliver personalized and tailored solutions to customers. By leveraging AI algorithms, retailers can analyze customer preferences and behavior to curate product recommendations and enhance the overall shopping experience. From crafting email communications to developing engaging social media content, GenAI has become a versatile tool for retailers to connect with their target audience on a deeper level.

Despite the benefits of GenAI, many small and medium-sized enterprises (SMEs) remain hesitant to embrace this technology. Concerns about timing, implementation costs, and the complexity of AI integration are common barriers cited by businesses. However, the overwhelming majority (93.4%) of surveyed businesses plan to leverage GenAI within their companies in the near to medium term, indicating a growing recognition of its potential benefits and competitive advantage.