29.11.2023
In this article, AI expert Helmut van Rinsum highlights the increasing but still underutilized role of AI in retail, emphasizing its potential for enhancing customer experience and efficiency in various areas, as confirmed by recent studies.
Helmut van Rinsum
Guest Author & AI Expert
Prices that automatically adjust to current demand and competition, product recommendations that are individually tailored to users, or chatbots that respond precisely to customers' questions: the use of Artificial intelligence (AI) can make sense in a wide variety of areas in retail. Depending on the definition, around twenty different areas can currently be identified in which AI can lead to greater efficiency or a better customer experience in the company. Against this background, it is hardly surprising that AI is the most important technology of the future for the retail sector - as it has been in previous years.
This is confirmed by the study "Technology Trends in Retail 2023", for which the EHI Retail Institute surveyed the CIOs and IT managers of almost 100 retailers in German-speaking countries. Since the study was conducted two years ago, it also reveals developments. On the one hand, it shows that more and more retailers are using AI. On the other hand, it is also clear that the potential is far from exhausted.
A survey by the HDE, which was completed at the end of January, indicates just how great this untapped potential is. In the survey, almost 68 percent of companies stated that they do not use AI and do not plan to do so for the time being. The technology has not yet reached the mainstream, admitted Stephan Tromp, Deputy CEO of the HDE, at the presentation of the study. Yet AI clearly belongs to the future. Tromp: "There are more opportunities to use it in retail than many realize."
Jumbo, Switzerland's largest omnichannel retailer in the construction, garden, and hobby sector, has recognized the benefits of AI. The company, which has a network of more than 120 stores in Switzerland, is currently working on deploying a virtual shopping assistant. This is intended to further improve online advice, thereby enhancing the customer experience and, not least, leading to more sales. Without data and artificial intelligence, however, the assistant would not be of any real help.
But why are many companies hesitant to use AI despite such success models? The HDE study also provides an initial answer to this question. AI solutions are primarily implemented when this can be done in an uncomplicated manner. A camera system for theft protection at the PoS is quickly installed and a comparatively popular use case as a stand-alone solution. Complex projects, such as setting up a cashierless supermarket or predictive baskets, on the other hand, are dealt with rather hesitantly. "Companies may initially focus on using AI in areas where visible results can be achieved quickly in order to justify their investments in AI," reads one possible explanation for this from the HDE.
Some evidence suggests that this is a snapshot, however. The number of companies that are not yet planning to use AI is decreasing. The triumph of applications such as ChatGPT or text-to-picture AIs such as Midjourney alone has given the topic a broad impact that even reluctant company bosses can no longer ignore. At the same time, the number of use cases that clearly demonstrate a connection between the use of AI and corporate success is increasing. In the annual report "State of AI in the enterprise" by the international consulting firm Deloitte, no less than 94 percent of all decision-makers surveyed stated that they see artificial intelligence as crucial to future corporate success.
For them, it's all about securing and expanding their own competitiveness in a rapidly changing world. AI can pave the way to that future. That, at least, is the concrete idea that retail companies have in mind when it comes to the concepts they are planning. Prioritized remodeling plans this year include, for example, optimizing warehouse space, automating assortment monitoring and optimizing inventory with event forecasting, according to the HDE study.
So retailers are venturing into complex projects after all, but clearly have efficiency gains in their sights.
Prices that automatically adjust to current demand and competition, product recommendations that are individually tailored to users, or chatbots that respond precisely to customers' questions: the use of Artificial intelligence (AI) can make sense in a wide variety of areas in retail. Depending on the definition, around twenty different areas can currently be identified in which AI can lead to greater efficiency or a better customer experience in the company. Against this background, it is hardly surprising that AI is the most important technology of the future for the retail sector - as it has been in previous years.
This is confirmed by the study "Technology Trends in Retail 2023", for which the EHI Retail Institute surveyed the CIOs and IT managers of almost 100 retailers in German-speaking countries. Since the study was conducted two years ago, it also reveals developments. On the one hand, it shows that more and more retailers are using AI. On the other hand, it is also clear that the potential is far from exhausted.
A survey by the HDE, which was completed at the end of January, indicates just how great this untapped potential is. In the survey, almost 68 percent of companies stated that they do not use AI and do not plan to do so for the time being. The technology has not yet reached the mainstream, admitted Stephan Tromp, Deputy CEO of the HDE, at the presentation of the study. Yet AI clearly belongs to the future. Tromp: "There are more opportunities to use it in retail than many realize."
Jumbo, Switzerland's largest omnichannel retailer in the construction, garden, and hobby sector, has recognized the benefits of AI. The company, which has a network of more than 120 stores in Switzerland, is currently working on deploying a virtual shopping assistant. This is intended to further improve online advice, thereby enhancing the customer experience and, not least, leading to more sales. Without data and artificial intelligence, however, the assistant would not be of any real help.
But why are many companies hesitant to use AI despite such success models? The HDE study also provides an initial answer to this question. AI solutions are primarily implemented when this can be done in an uncomplicated manner. A camera system for theft protection at the PoS is quickly installed and a comparatively popular use case as a stand-alone solution. Complex projects, such as setting up a cashierless supermarket or predictive baskets, on the other hand, are dealt with rather hesitantly. "Companies may initially focus on using AI in areas where visible results can be achieved quickly in order to justify their investments in AI," reads one possible explanation for this from the HDE.
Some evidence suggests that this is a snapshot, however. The number of companies that are not yet planning to use AI is decreasing. The triumph of applications such as ChatGPT or text-to-picture AIs such as Midjourney alone has given the topic a broad impact that even reluctant company bosses can no longer ignore. At the same time, the number of use cases that clearly demonstrate a connection between the use of AI and corporate success is increasing. In the annual report "State of AI in the enterprise" by the international consulting firm Deloitte, no less than 94 percent of all decision-makers surveyed stated that they see artificial intelligence as crucial to future corporate success.
For them, it's all about securing and expanding their own competitiveness in a rapidly changing world. AI can pave the way to that future. That, at least, is the concrete idea that retail companies have in mind when it comes to the concepts they are planning. Prioritized remodeling plans this year include, for example, optimizing warehouse space, automating assortment monitoring and optimizing inventory with event forecasting, according to the HDE study.
So retailers are venturing into complex projects after all, but clearly have efficiency gains in their sights.
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