AI Poised To Disrupt Retail During the Next Five Years

American retailers believe that artificial intelligence (AI) will transform the retail industry, as reported by Synchrony and Oxford Economics in their newly released study, “Shopping for AI.”

The study, which surveyed 324 U.S. retail executives, revealed that 80 percent of respondents believe AI will change the online customer experience; 72 percent believe it will be a competitive necessity for businesses within the next five years.

Large retailers are the biggest adopters of AI technology and are the most likely to use AI for machine learning, virtual agents, and robotic process automation subsets. However, nearly half of retail companies of all sizes plan to incorporate AI into their businesses over the next three years. The study showed that retailers plan to employ AI for a variety of purposes, including quality control (46 percent), analyzing data to forecast market trends (46 percent), fraud detection (45 percent), and inventory planning (43 percent).

“AI is one of the most disruptive technologies for the retail industry—impacting supply chains, customer service, and payments,” said Greg Simpson, chief technology officer and AI leader at Synchrony. “Investing in AI technology is no longer optional for merchants, but some may struggle with leveraging the insights in the most effective way to glean true outcomes.”

Many businesses are already using AI-powered technologies to improve their data insights to the next level and enhance customer experiences. Sixty-four percent of respondents said they use AI to capture data and learn more from customers, and 40 percent said they use this data to predict customer behavior.

Many retailers, however, said they face challenges to investing in AI technologies, including a lack of budget and mature technology and difficulty prioritizing investments.