In a recent report by IDC, it has been forecasted that 85 percent of A2000 retailers will undergo testing and investment in Generative AI (GenAI) to enhance various aspects of their operations including product data management, customer support, and overall customer experience initiatives by the year 2027.
This significant shift indicates the increasing influence of AI and GenAI in the retail sector, pushing retailers to adopt technology-driven solutions to bolster operational efficiency, customer engagement, and data management practices.
According to IDC, the integration of Artificial Intelligence (AI) and Generative AI (GenAI) is reshaping the retail landscape, transforming how retailers interact with customers, manage their operations, and optimize supply chains. The report highlights several AI-driven predictions that are set to redefine the retail industry, offering unprecedented opportunities for personalization, efficiency, and growth:
Contextualized Recommendations: By 2028, half of A2000 retailers are expected to offer AI-enabled contextualized recommendations, leading to a 40 percent increase in real-time interactions and a 15 percent boost in overall conversion rates.
Contextual Ad Targeting: By 2027, more than half of A500 retailers will utilize AI for contextual ad targeting to power next-gen retail media networks, enabling them to monetize zero-party and first-party data business models effectively.
Computer Vision Enhancements: By 2027, a quarter of A2000 retailers will implement computer vision technology to streamline self-checkout processes, reducing shrink by 75 percent and enhancing services like BOPIS and curbside pickup, making them 25 percent less time-consuming.
The IDC Global Retail Innovation survey 2023 identifies Generative AI-powered chatbots as a top emerging technology for customer service in the region’s retail industry. The future of customer service is envisioned as a hybrid model, with GenAI chatbots handling routine interactions while human associates focus on addressing more complex needs. This integration promises not only improved customer experience but also drives operational efficiency across the sector.
Retailers in the Asia/Pacific region are positioned for significant transformation driven by AI innovation. Leveraging GenAI’s capabilities, these retailers aim to create a more inclusive, culturally sensitive, and personalized customer experience, fostering stronger customer relationships and driving market growth. AI and GenAI are particularly crucial in tailoring the shopping journey for Asia’s “next billion” digital customers, guiding them through online shopping and aiding in product discovery.
In order to thrive in this evolving retail landscape, a dynamic technological strategy is essential. Beyond the impact of AI and GenAI, retailers in the Asia/Pacific region must embrace a holistic approach to stay competitive. Other predictions highlighted by IDC include:
Decentralized Infrastructure: By 2026, half of A2000 retailers are expected to adopt decentralized infrastructure to enhance data management, reduce costs, and improve security.
Mobile and Wearable Inventory Management: By 2026, the majority of A2000 retailers will deploy mobile devices, wearables, and BYOD programs to enable clienteling, inventory/fulfillment processes, queue busting, mobile POS, and employee self-service.
IoT for Perishables: By 2028, 40 percent of A2000 grocery supply chains will utilize intelligent IoT to monitor perishables, reducing food waste by 25 percent, inventories by 15 percent, and improving quality by 30 percent.
Multilevel Loyalty Strategies: By 2024, 30 percent of A2000 retailers will adopt multilevel loyalty strategies to increase retention rates and Net Promoter Scores.
Increased Security Spending: By 2025, 40 percent of A2000 retailers will increase spending on next-gen security technologies to address revenue loss from fraud/theft and cyberattacks.
Product Experience Management: By 2028, 30 percent of A2000 retailers will transition to product experience management SaaS platforms to enhance consistency and boost Customer Satisfaction Scores.
“Retailers in Asia/Pacific are moving towards a digital-first approach, with AI and GenAI driving this transformation,” says Vijay Sarathi Gollapalli, Research Manager at IDC Retail Insights Asia/Pacific.
“These technologies are pivotal in unlocking new levels of customer engagement and operational agility, paving the way for a future where retail experiences are more personalized, efficient, and resilient,” Gollapalli concludes.
