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Don’t Get Caught On The Wrong Side Of The AI Divide

Brian McGlynn, Total Retail
23.3.2020 and other retailers that are embracing artificial intelligence (AI) and omnichannel strategies are on one side.

A growing chasm is cutting through the retail sector. and other retailers that are embracing artificial intelligence (AI) and omnichannel strategies are on one side. On the other side are businesses that are not investing in new technology and the future.

If members of the second group don’t get moving on AI fast, they'll be left teetering on the precipice — or worse, disappearing into the retail abyss.

Amazon hasn’t just set the bar; it is the bar. As we all know, that has changed the game for all of retail. A McKinsey & Co. report indicates that 35 percent of consumer purchases on Amazon come from AI-powered product recommendations. And that report was published back in 2013. Therefore, retailers that haven’t begun formulating their AI strategies are already late to the game.

The Time To Invest In AI Is Now

The pace of the retail game will only accelerate in the years ahead. That means retailers must embrace AI now to survive and thrive in an increasingly competitive marketplace.

Research suggests that’s what many retailers plan to do. Retailers around the world will invest $12 billion on AI services by 2023, Juniper Research says. That’s a 230 percent increase from 2019.

Juniper Research expects more than 325,000 retailers to contribute to that increase. In return, retailers will enjoy back-office efficiencies, better forecasting, greater agility and higher margins. And Gartner says that by 2023, most organizations using AI for digital commerce will achieve at least a 25 percent improvement in customer satisfaction, revenue or cost reduction.

AI Effort Should Be Part Of A Holistic, Omnichannel Strategy

Yet some retailers remain hesitant to embrace AI. That may be due to reports about others’ failures to gain expected financial results from AI. In one survey, 40 percent of companies said they had yet to report any business gains from AI. However, the same report indicates that AI “winners” view the technology strategically, not just as a point solution.

Buy-in on AI investments needs to come from the top. With the proper buy-in, and experienced technology and integration partners, retailers can reap the benefits of AI across their entire organizations — within their supply chains and both in-store and online.

Taking a holistic approach to AI also enables retailers to support omnichannel strategies. Omnichannel strategies enable retailers to meet customers where they are and deliver seamless experiences, whether they're shopping in-store or online. The omnichannel trend is illustrated by the fact that many formerly online-only businesses, including  Amazon and Germany’s Mister Spex, have recently opened brick-and-mortar stores.

Read the full story on Total Retail

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