Where do retail experts stand on AI for 2024?

Experts highlight that the pace of AI adoption in 2024 will be much faster than earlier, but it will depend on certain factors

New Delhi: Indian retailers are hoping to ramp up their spending on AI (Artificial Intelligence) in 2024. They seek to achieve stronger client relationships with anticipatory analytics reshaping demand forecasting, and refining inventory management.

The rapid pace of adoption and the increasing areas of operations are owing to the successful implementation of AI in customer management, personalised offerings, ease of finding products and result-oriented productivity that retailers saw in previous years.

IndiaRetailing had earlier reported on how retail companies globally leverage generative AI’s potential in their daily operations and offerings.

These daily operations included AI-based visual searches; ad creation; image, text and video generation for marketing campaigns; supply chain management and many other areas of operations.

Data from Fortune Business Insights show that retailers spent $5.50 billion in 2022 on AI-led automation and projects and this spending is projected to jump by 34% compound-annual-growth-rate (CAGR) to reach $55.53 billion by 2030.

The report further said that India is expected to register the highest CAGR in the adoption and implementation of AI in the Asia-Pacific (APAC) region because of its high demand for automation tools.

While companies used it to boost productivity and to smoothen their daily operations in 2023, they are expected to take the usage to the next level by facilitating training for employees, increasing their spending and also enhancing the areas of operations.

“Retailers who adeptly utilise AI will emerge as the clear winners. There is a significant opportunity for retailers to enhance the accuracy of their services, and many are already advancing rapidly on this path,” said Kumar Rajagopalan, chief executive officer, Retailers Association of India.

Kumar Rajagopalan also explained the impact AI will have on consumers saying that consumers can expect a notable elevation in retail standards. “The integration of AI in retail is more than just an operational upgrade; it’s a strategic move towards creating more customer-focused and efficient retail experiences,” he added.

Areas of focus for AI in retail

According to experts 2024 will witness much broader and more impactful applications of the technology, but the focus areas will depend on industries and other factors.

“Retailers are now embracing AI not just as a tool, but as a core component of their business strategy. The ability of AI to process and analyse vast datasets provides retailers with unprecedented insights into consumer behaviour. These insights enable retailers to develop highly targeted strategies,” Kumar Rajagopalan of RAI said.

AI could be used for enhancing a host of services, from the overall customer experience to security aspects, according to Santosh Reddy, chief technology officer, ShakeDeal, a procurement-focused B2B e-commerce platform.

“2024 signifies a pivotal leap in B2B e-commerce, showcasing AI’s transformative prowess in enhancing customer experiences, operational efficiency, and cybersecurity, and we look forward to it,” Reddy said.

Kartik Narayan, chief executive officer of TeamLease Services, a staffing firm says that personalisation, customer experience, inventory management, demand forecasting, customer service automation, data analysis, market insights, automated warehousing and fulfilment will be the key areas where the retail sector is more aligned to use AI in 2024.

Another area of focus is analysing customers’ patterns and reducing manual work.

“People will use artificial intelligence to study consumption behaviour patterns and flag inconsistencies that will reduce a lot of manual and mundane work,” said Madhav Kasturia, founder, Zippee, an e-commerce fulfilment platform.

“AI will also boost the efficiency of last-mile infrastructure by examining data and compiling patterns. AI will essentially replace data analysts to start with,” Kasturia added.

Factors like supply chain, customer experience, inventory management, demand forecasting, service and warehouse automation will all be the areas that are going to witness more advancements in comparison to 2023.

“In 2024, AI algorithms will revolutionise the landscape of retail through hyper-personalised support, product recommendations, and targeted marketing,” said Sheshgiri Kamath, chief executive officer, Kapture CX, an AI-driven Customer Support Platform for Enterprises.

Kamath adds that AI tools will extend their reach to employee training, workforce management, and productivity enhancement, leveraging analytics for optimised staffing and operational efficiency with a focus on supply chain optimisation, fraud detection and security and price optimisation.

This aligns with findings of a recent survey by hiring and job search platform Indeed, which found that around 59% of employees in India are ready to use and embrace the potential of artificial intelligence and generative AI-based tools in their daily work.

Pace of implementation

While the adoption of the technology is evident, the pace depends on factors like the cost of technology, customised tools for companies, Large Language Modules and their accuracy among other conditional factors.

Kasturia of Zippee said that e-commerce will be one of the early adopters of the technology.

Narayan of TeamLease Services adds that the pace of integration will likely be rapid. The adoption pace will also be influenced by the increasing availability of user-friendly AI tools, enabling even non-technical employees to utilize AI in their daily work.

“The rapid integration of AI is poised to grant a competitive edge to companies. The pace of this transformation may be influenced by regulatory factors, ethical considerations, and the availability of skilled AI professionals,” said Kamath of Kapture CX.

“The pace of AI integration in the D2C market is accelerating rapidly. As technology advances, the potential for increased efficiency and innovation in D2C through AI is significant,” said Deep Bajaj, chief executive officer, Sirona Hygiene, a company that sells feminine hygiene products.