GenAI’s impact on retail unfolding faster than expected

By: Trademagazin editor Date: 2024. 06. 21. 09:42

Retailers now leverage GenAI for a competitive edge in communications, marketing, and operations.

The impact of generative AI (GenAI) is inevitable and will disrupt various sectors, including retail, according to Amanda Chin, a partner at Bain & Company in Kuala Lumpur.

“It goes without saying that GenAI is not a passing fad. It will disrupt every industry; it’s just a question of speed and scale,” she said at the recent Retail Asia Forum.

“We’re already seeing significant impacts in industries like financial services, where knowledge management and advice are crucial, and it has begun affecting retailers worldwide,” added Chin.

She observed that retailers are now grappling with fundamental questions regarding the identification of promising use cases, optimal implementation timing, and the essential readiness of organisational structures.

The shift, she emphasised, reflects a growing recognition amongst industry players of GenAI’s potential to drive significant value creation.

In a recent Bain & Company report, retailers were to expand their initial AI investments to match the rapid uptake of AI amongst consumers. It emphasises the potential of GenAI to substantially increase efficiency and decrease expenses throughout the industry.

Mikey Vu, also a partner in Bain & Company’s Retail Practice, stressed the transformative influence of GenAI on the retail sector, including conversational search and personalised apps.

He said technology is reshaping the retail landscape at a pace that may surpass previous milestones such as the advent of smartphones or the internet.

The report noted that AI-powered tools, like conversational shopping assistants and improved search features, can personalise customer experiences, potentially increasing revenue by 5 to 10%. Also, consumers trust AI more for personalised shopping recommendations than for any other use case.

Drawing from a recent survey conducted amongst retailers, Chin also cited compelling insights into the current adoption trends and primary business objectives associated with GenAI.

From enhancing customer communications to optimising marketing strategies and streamlining internal operations, she noted retailers are strategically leveraging GenAI to gain a competitive edge in today’s dynamic market environment.

To simplify the multifaceted landscape of GenAI applications, Chin categorised them into three overarching areas: deepening customer engagement, enhancing operational efficiency, and building resilient business models.

She noted that this strategic framework enables retailers to prioritise initiatives based on their commercial impact, thereby maximising the value derived from GenAI investments.

Chin highlighted the rapid evolution of perceptions surrounding GenAI, emphasising a shift from cautious exploration to confident adoption within the retail sector.

Retail Asia

Related news