Daily Management Review

Experts Say AI To Be Adopted The Fastest In Retail In Next 3 Years


Experts Say AI To Be Adopted The Fastest In Retail In Next 3 Years
According to experts of the retailing industry, in terms of adoption of artificial intelligence by industries, the global retail industry will be the fastest.
"Technology will continue to strip friction from brick-and-mortar retail and AI will become retailers' go-to technology," said Deborah Weinswig, CEO and founder of U.S. retail and tech consultancy Coresight Research.
"Retail will adopt AI technology the fastest in the next three years," said Weinswig. It is anticipated that the rate of AI adoption in the industry over the next three years would be about 54 per cent.
That rate of adoption would be much higher than the rates of adoption of AI by the banking, manufacturing and healthcare industries which have made use of high end technology extensively in recent times.
For 2018, data showed that the highest spending for AI development and adoption in terms of industries was made by the global retailing industry at $3.4 billion, followed by the banking sector at $3.3 billion, Weinswig said.
Communication, optimization, rationalized inventory and experiential retail are the activity areas of retail where AI was had the most impact while the aspect of AI that are mostly likely to have the greatest impact on retailing business include rule-based reasoning, machine learning, natural language processing, and machine vision, she said.
Retailers have not had the need to increase staff numbers and yet enhance customer experience with the help of AI. According to Weinswig, the AI capabilities that have helped retailers most include smart chatbots that are able to respond to customer requests while the difference between the computer and human interface was reduced by AI voice recognition. She also pointed out to retailers have been able to better predict customer preferences and make recommendations with the help of big data analysis.
She added that retailers have been able to make rapid change to prices to react to changes in competition and demand and to set precise price for their products with the help of AI-powered dynamic pricing.
Hui Cheng, head of robotics research, Silicon Valley Research and Development Center of JD.com said that this Chinese e-commerce giant has been able to make use of AI technologies and through strategic tie ups with Google, Tencent and Walmart to enhance its cross-border retail business.
Same or next-day delivery has been made possible because of AI and the Chinese retailer has also been able to gain efficiency and flexibility to handle hundreds of millions of orders during peak sales, he said. According to the researcher, other aspects of JD.com’s activities that were enhance with the help of include optimization of inventory placement and transportation, development of new product and predicting demand.
"AI is not only the brain, but also the hand, the mouth and the feet and everything in between including the heart (for retail business)," he said.
Between 2017 and 2022, the top country in terms of spending for AI would be China followed by the US, according to Weinswig. China would lead the way because of massive investment, popularity of large tech companies like Tencent and Alibaba, supportive government policies and presence of large consumer data because of large population.