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Over 70% of Indian retailers plan to adopt Gen AI over next 12 months: EY survey Over 70% of Indian retailers plan to adopt Gen AI over next 12 months: EY survey

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Over 70% of Indian retailers plan to adopt Gen AI over the next 12 months, with a majority of them using it to improve customer experience, drive innovation and lower costs, according to a survey released by EY on Thursday.

Traditionally, the industry has relied on data to predict consumer behaviour and handle inventories. Of those surveyed in India, 6% have already implemented Gen AI, while 71% in the retail sector plan to adopt it within the next 12 months, underscoring its perceived value.

Current global retail investments in AI, pegged at $5 billion, are expected to touch $31 billion by 2028. In fact, 88% of respondents in the retail sector think Gen AI will have a medium to high impact on their retail business. According to the EY report, by 2025, Gen AI could lift the retail sector’s profitability by 20%.

“The technology does not just reduce overheads but can significantly increase sales through tailored consumer experiences. Even local retailers can provide ‘hyper-local’ personalized shopping experiences by integrating Gen AI tools,” it said.

“Gen AI is not just a technological leap; it’s a seismic shift in how retailers adapt, innovate, and enhance customer experiences. With 71% gearing up for adoption, it’s clear that the retail landscape is on the brink of a transformative era. But as we ride this wave, privacy, ethics, and readiness take center stage. Board, CEO and CIO leadership must navigate this AI revolution, balancing innovation with responsibility to craft a future where technology not only drives profits but also enriches our shopping experiences with integrity and transparency,” said Angshuman Bhattacharya, National Leader, Consumer Product and Retail Sector, EY India.

Of those surveyed, 76% said they foresee AI having the greatest impact on customer experience, followed by its impact on product innovation (65%), cost reduction (54%), and the entire value chain (50%).

Meanwhile, usage of Gen AI also raises privacy concerns with location tracking for real-time promotions, necessitating transparency in data usage. The survey indicates that 80% of organizations express low-to-moderate readiness, citing unclear use cases and a skills gap. Currently, 82% prefer partnerships with external tech providers for Gen AI implementation.

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Published: 18 Jan 2024, 01:08 PM IST

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