Artificial intelligence (AI) is transforming the retail sector in India, as more than 70% of retailers plan to adopt Gen AI over the next 12 months, according to a new survey by EY. Gen AI refers to the use of AI across the entire value chain, from product design and manufacturing to customer service and marketing.
Gen AI for enhanced customer experience and innovation
The survey, which covered 300 retail executives from 15 countries, including India, revealed that Indian retailers are rapidly embracing Gen AI, with 70% planning adoption for enhanced customer experience and innovation in the next year. This is higher than the global average of 58%. The survey also projected a US$ 31 billion global AI retail investment by 2028.
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 . 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%).
Gen AI for competitive advantage and growth
The survey also highlighted the benefits of Gen AI for retailers, such as increased revenue, improved customer loyalty, reduced costs, and enhanced efficiency. According to the survey, retailers who have adopted Gen AI reported an average revenue increase of 10%, while those who plan to adopt it expect an average revenue increase of 12% over the next three years.
Moreover, Gen AI can help retailers gain a competitive edge in the market, as 82% of Indian respondents said they believe that Gen AI will be a key source of differentiation in the retail industry by 2028. Additionally, 78% of Indian respondents said they believe that Gen AI will enable them to create new business models and revenue streams in the future.
Gen AI for ethical and responsible use
However, the survey also pointed out some of the challenges and risks associated with Gen AI adoption, such as data privacy, security, ethics, and governance. The survey found that only 38% of Indian respondents have a clear ethical framework for using AI in their business, while 54% said they have some ethical guidelines but not a formal framework.
The survey also suggested some best practices for retailers to adopt Gen AI in a responsible and ethical manner, such as ensuring data quality and accuracy, obtaining informed consent from customers, protecting data security and privacy, complying with relevant regulations and standards, and monitoring and auditing AI performance and outcomes.