What are the biggest barriers to AI adoption for retailers?
According to KPMG’s “Living in an AI World 2020 Report,” retailers have some optimism, some skepticism and some pessimism about how artificial intelligence (AI) will impact the industry.
The study explored how 751 insiders across five industries, including retail, view the future of AI in their sectors.
On the downside, 64 percent of retail insiders agreed that the use of AI to help businesses is more hype than reality right now.
The study also identified numerous challenges retailers believe they face in capitalizing on AI’s potential:
- AI readiness: Just 43 percent of retail respondents believe their employees are prepared for AI adoption. Relatedly, only 52 percent say their companies offer any type of AI training.
- Job loss threats: Respondents believe only 26 percent of retail employees are supportive of the adoption of AI, partly due to concerns over job loss. Sixty-two percent believe retail workers are worried about AI taking away jobs and 54 percent are worried that their own jobs could be replaced by AI someday.
- Data security: Seventy percent of retailers said perceived threats involving consumer data security and privacy may slow AI adoption. Ninety percent agreed that their companies need to be responsible for implementing a code of ethics.
Despite concerns, 80 percent of retail insiders say AI technology — such as chatbots and self-checkout — is already regularly being used to alleviate customer service issues. Eighty-six percent believe AI has the potential to significantly improve organizational efficiencies.
Among specific applications, customer intelligence will see the biggest impact within two years from AI, say 56 percent. That’s followed by self-checkout services, 55 percent; chatbots for customer service, 45 percent; supply chain planning, 44 percent; and marketing/advertising, 43 percent.
Bill Nowacki, managing director, decision science, KPMG, believes AI will prove to be particularly beneficial in helping retailers fine-tune execution at the local level. “There’s a push to say, Can I get better with local relevance and placement? Am I in the right locations? Is my format right? Do I have the right items in the store? AI is really helpful in all these areas,” he said.
DISCUSSION QUESTIONS: Where do you see the pain points, perceived risks and challenges facing U.S. retailers related to AI? Which AI benefits are realizable now and which may be more hype than reality for many years to come?