1、AI Strategy Divide:Bridging the Perception Gap in Retail1Bridging the Perception Gap in RetailAI STRATEGY DIVIDEUnlocking AI insights from top apparel,footwear,and home dcor leaders.AI Strategy Divide:Bridging the Perception Gap in Retail2TABLE OF CONTENTS03OverviewBenefits of AI in RetailAI Applica

2、tionsAI ResourcesConclusionMethodology0506091013Implementation Challenges08Appendix15AI Strategy Divide:Bridging the Perception Gap in Retail3OverviewINTRODUCTIONArtificial Intelligence has quickly become one of the hottest topics in retail.Misperceptions abound:it will save businesses,it will kill

3、employment,its difficult to use,the ROI isnt there,it cant be trusted.However,the benefits are therebut to successfully capture the magic AI can bring to any retail organization,CEOs and their management teams need more education to successfully harness its benefits.This report reveals how top retai

4、lers are thinking about AI,how they feel it will help their businesses,and what they believe will be the top AI retail applications over the next five years.The 165 participants included CEOs as well as their cross-functional management teams from apparel,footwear,and home dcor retailers.Many of the

5、 results are surprising,especially the misalignment discovered between CEOs of enterprise level business($100 million or more in annual revenue)and their management teams.Each group has its own strategic imperative-which may explain the misalignment-but to stay ahead and effectively harness the powe

6、r of AI for retail,these teams will need to agree on an AI roadmap to remain competitive.AI Strategy Divide:Bridging the Perception Gap in Retail4EDUCATION IS THE WAY FORWARDAI ALREADY IN USE WITH HALF OF RETAILERSGEN AI#1 MOST PROMISING RETAIL APPLICATIONWhile more than half of respondents are fami

7、liar with AI in Retail and believe it is used for both internal and external-facing functions,too many respondents are still unfamiliar with both.More than half of respondents are leveraging AI in some capacity across their businesses today.Generative AI for Personalized Marketing&Recommendation Eng

8、ines was selected as the top application holding the most promise for retail over the next 5 years.CEOS DIVERGE FROM THEIR TEAMSAI IS CRUCIAL TO RETAILS FUTURESECURITY NAMED GREATEST HURDLE TO AI IMPLEMENTATIONCEOs and their management teams at enterprise level businesses had a number of disparities

9、 that indicate major misalignment on their use of AI.More than half of CEOs of enterprise-level businesses believe that the role of AI-based technology is fundamental to the future of retail.More awareness and expertise is needed in all retailers surveyed along with more clarity on AIs security and

10、privacy issues.OverviewREPORT HIGHLIGHTSOver 3/4 plan to implement generative AI53%of respondents are currently using AI at their companyOnly 1%say AI is Not Important to the future of Retail91%say they are familiar with how AI is used in RetailK E Y F I N D I N G S2/3 plan on implementing generativ

11、e AI in marketing in the next 6-12 months78%believe AI is fundamental or important to the retail.Retailers define AI as technology,used to automate and optimize both consumer-facing and internal-facing applications.AI Strategy Divide:Bridging the Perception Gap in Retail5Q:Select the top 3 business

12、benefits AI provides to retailers and wholesalers.56%56%39%39%33%33%28%17%42%55%38%23%38%25%34%47%Cost SavingsImproved CustomerExperienceTime SavingsBusinessTransformationHigher SalesMarginImprovementsCompetitiveAdvantageInnovationCOMPANIES$100M CEO Manager+EmployeesCEO VS EMPLOYEESDifferent Views o

13、n AI Technology BenefitsCustomer Experience topped the list of the 3 most promising business benefits for AI in Retail overall.However,Enterprise CEOs see Cost Savings equally beneficial,with their management teams placing a higher value on AIs ability to foster innovation.Benefits of AI in RetailCu

14、stomer experienceInnovationCost saving321ALL RESPONDENTSTop 3 Benefits AI Strategy Divide:Bridging the Perception Gap in Retail613%26%33%33%33%39%39%39%46%52%19%17%17%23%27%33%23%63%50%27%Robotic Process AutomationVisual Recognition&AR ShoppingVoice Search&Conversational CommerceIn-Store AnalyticsEn

15、hanced Price OptimizationEnhanced Chatbots&Virtual AssistantsFraud Detection&Customer Sentiment AnalysisEnhanced Predictive AnalyticsGenerative AI for Personalized Marketing&Recommendation EnginesGenerative AI for DesignQ:Select the top 3 AI applications you believe hold the most promise for the ret

16、ail sector in the next 5 years.COMPANIES$100M CEO Manager+EmployeesCEO VS EMPLOYEESDifferent Views on AI ApplicationsCEOs see Gen AI for Product Design as the AI application that holds the most promise over the next 5 years while their management teams believe that AI will enhance predictive analyti

17、cs to improve critical retail functions such as demand forecasting and inventory management.Top AI Applications in the Next 5 Years Generative AI for MarketingPredictive AnalyticsChatbotsGenerative AI for DesignFraud Detection&Customer Sentiment5432145%42%35%31%29%ALL RESPONDENTS32%AI Strategy Divid

18、e:Bridging the Perception Gap in Retail7CASE STUDYRetailer Uses Forward-Looking Predictive Analytics to Increase Prices 33%While Maintaining DemandSituationEffectively pricing products can be a tough decision,especially when youre the middleman.Factors such as consumer demand and wholesaler calculat

19、ions play a huge part.Wholesalers can stay competitive with retail product pricing tools to equip retail partners with optimal initial pricing backed by predictive analytics.A footwear wholesaler wanted to assess whether they could price a boot at$29.99 when the retailer believed the boot would only

20、 sell for$19.99.ActionThe wholesaler decided to run a test with First Insights price optimization software to evaluate what the optimal initial price should be.A test was conducted with their target audiences at a price of$29.99.OutcomeConsumers saw great value in the boots at$29.99 and results did

21、not show a decrease in overall demand.The wholesalers sales team was more confident presenting the campaign to the retailer at$29.99 and convinced the retailer to invest in the boot program with the higher ticket price of$29.99(vs.$19.99).This allowed both the retailer and the wholesaler to obtain h

22、igher margins,as the production cost of the boots remained the same,while still maintaining demand.AI Strategy Divide:Bridging the Perception Gap in Retail8Q:Select the top 3 challenges in implementing AI-based solutions at your company.CEO VS EMPLOYEESDifferent Views on AI Technology Implementation

23、17%22%22%28%28%28%33%39%39%44%32%9%28%34%43%32%21%26%21%53%Lack of infrastructureBad experience with past implementationsUnproven and/or Unreliable SolutionsCosts(financial,time,skills)Lack of awareness,understanding,and/or expertiseLack of Control/Insight to the“AI”part of the solutionFear of workf

24、orce impactBusiness case and ROI JustificationRisk of costly AI-based recommendations and actionsData security and privacyLack of awarenessData security and privacyCost(financial,time,skills)ALL RESPONDENTSTop 3 Challenges 321Overall findings indicate that awareness is the number one difficulty to o

25、vercome for implementing AI applications in their businesses.Data privacy and security topped the breakout CEO/management subset.COMPANIES$100M CEO Manager+EmployeesImplementation Challenges for AI in RetailAI Strategy Divide:Bridging the Perception Gap in Retail956%50%44%33%33%33%28%22%58%15%21%35%

26、48%40%44%38%Workshops on AI use casesfor RetailReferrals from leaders insimilar companies and rolesCoworkers who will lead thechargeExpert ConsultationsSeminars and classes on AItechnology for RetailAI Implementation Use Casesand Case StudiesCertifications and Standardsfor AI in RetailRegulatory and

27、 complianceguidesCOMPANIES$100M CEO Manager+EmployeesQ:Select the top 3 resources that would benefit you the most on your AI journey in the future.CEO VS EMPLOYEESAI Education PreferencesWorkshops on the use cases and benefits of AI topped the overall findings for preferred educational methods for t

28、he total group as well as the subset of enterprise CEOs and their teams.Half of CEOs also value referrals from leaders of other companies like theirs.Preferred Education Resources321ALL RESPONDENTSTop 3 Resources WorkshopsSeminars and ClassesUse Cases and Case StudiesAI Strategy Divide:Bridging the

29、Perception Gap in Retail10AI in Retail will continue to gain importance and traction for customer experience,predictive analytics,and cost savings.CEOs and their teams need to understand the various benefits AI can bring to their businesses,after which they can agree on the strategy that best serves

30、 their businesses and customers.There is no“one size fits all”AI implementation strategy.The strategic disconnect discovered between retail CEOs and their management teams points to a severe knowledge gap within enterprise-level retailers that will be an impediment to future growth and profitability

31、.CEOs and their teams will need to transform their organizations into more agile,data-driven businesses by leveraging AIs vast potential not simply to cut costs,but also to win at innovation.ConclusionCLOSING THOUGHTSAI Strategy Divide:Bridging the Perception Gap in Retail11Design Winning Products Y

32、our Customers LoveACTIONABLE INSIGHTS POWERED BY PREDICTIVE ANALYTICS&VOICE OF CUSTOMER DATA Predict Winning Products 50-80%increase in Success Optimize Pricing Increase Margins 4-10%Manage Inventory Up to 18%Reduction Sell More.Waste Less.5-15%Reduction in Emissions Get to Market Faster Reduce Deve

33、lopment Time up to 50%Maximize Return 5-15X ROI Stop reacting and start predicting.See how we can help you make decisions with confidence.Lets TalkAI Strategy Divide:Bridging the Perception Gap in Retail12First Insight,Inc.Viki ZabalaSVP of MarketingFirst Insight,IContactMediaStacy Berns sbernsbcg-

34、Michael McMullanmmcmullanbcg-Berns Communications Group(212)-994-4660AI Strategy Divide:Bridging the Perception Gap in Retail13First Insights findings are based upon a December 2023 survey executed through InsightSUITE,featuring over 160 U.S.retail corporate employees in apparel,footwear,and home dc

35、or.Seventy-five respondents represent businesses grossing over$100 million annually.The study juxtaposes CEO responses with non-CEO staff to highlight contrasts and convergences in AI perceptions at the corporate and enterprise tier of retail.MethodologyABOUT THIS STUDYAI Strategy Divide:Bridging th

36、e Perception Gap in Retail14TOTAL RESPONDENTS165INDUSTRY BREAKDOWNQ:Which retail sector best aligns with your company?RESPONDENTSApparel111Footwear9Home Dcor45RETAILER TYPEQ:What business type best describes your company?RESPONDENTSRetailer Omni-channel70Retailer Brick and Mortar only16Retailer eCom

37、m only53Wholesaler26FUNCTIONAL AREASQ:What is your functional area?RESPONDENTSCEO80Strategic Planning1Product Design8Merchandising23Planning1Supply Chain2Marketing17Store Operations4Consumer Insights1Finance4IT21INDUSTRY BREAKDOWNQ:Which of the following best describes your current role level within

38、 your organization?RESPONDENTSC-Suite89Vice President(VP)8Director23Manager45COMPANY SIZEQ:What is your companys annual revenue?RESPONDENTSLess than$100 million89$100M-$499M31$500M-$999M18$1B-$5B21Over$5 billion6MethodologyRESPONDENT BREAKDOWNAI Strategy Divide:Bridging the Perception Gap in Retail1

39、5Which retail sector best aligns with your company?Which retail sector best aligns with your company?Apparel67%Footwear5%Home Dcor27%Other(Please Specify)0%What business type best describes your company?What business type best describes your company?Retailer-Omni-channel42%Retailer-Brick and Mortar

40、only10%Retailer-eComm only32%Wholesaler16%Other(Please Specify)0%None of the Above0%What is your functional area?What is your functional area?CEO48%Merchandising14%IT13%Marketing10%Product Design5%Strategic Planning1%Finance2%Other(Please Specify)2%Planning1%Supply Chain1%Consumer Insights1%Store Op

41、erations2%Which of the following best describes your current role level within your organization?Which of the following best describes your current role level within your organization?C-Suite54%Vice President(VP)5%Director14%Manager27%Other(Please Specify)0%What is your companys annual revenue?What

42、is your companys annual revenue?Less than$100 million54%$100M-$499M19%$500M-$999M11%$1B-$5B13%Over$5 billion4%AppendixRESPONDENT QUESTIONS AND RESULTS FOR ALL RESPONDENTSAI Strategy Divide:Bridging the Perception Gap in Retail16How familiar are you with Artificial Intelligence(AI)and its use in the

43、retail industryHow familiar are you with Artificial Intelligence(AI)and its use in the retail industryNot familiar at all9%Slightly familiar31%Moderately familiar31%Very familiar29%Which of the following definitions of AI for the retail industry do you agree with the most?Which of the following defi

44、nitions of AI for the retail industry do you agree with the most?AI for Retail is technology,used to automate and optimize both consumer-facing and internal-facing applications.52%AI for Retail is technology,primarily used for consumer-facing applications such as personalized shopping recommendation

45、s,virtual fit,virtual service/support,etc.26%AI for Retail is technology,primarily used for internally-facing applications such as demand forecasting,allocation,inventory management,transportation routing,etc.13%AI does not apply to the retail industry2%Im not sure7%Is your business currently levera

46、ging AI in any capacity?Is your business currently leveraging AI in any capacity?Yes53%No36%Not Sure11%Select the top 3 business benefits AI provides to retailers and wholesalers.Select the top 3 business benefits AI provides to retailers and wholesalers.Improved Customer Experience51%Innovation47%C

47、ost Savings45%Time Savings44%Higher Sales41%Competitive Advantage28%Margin Improvements24%Business Transformation20%Select the top 3 challenges in implementing AISelect the top 3 challenges in implementing AI-based solutions at your company.based solutions at your company.Bad experience with past im

48、plementations12%Business case and ROI Justification22%Lack of infrastructure26%Risk of costly AI-based recommendations and actions26%Fear of workforce impact26%Unproven and/or Unreliable Solutions30%Lack of Control/Insight to the“AI”part of the solution33%Costs(financial,time,skills)39%Lack of aware

49、ness,understanding,and/or expertise44%Data security and privacy44%How do you perceive the role of AIHow do you perceive the role of AI-based technology,processes,and applications in the future of based technology,processes,and applications in the future of retail?retail?Important,but not crucial42%F

50、undamental36%Supplementary21%Not Important1%AppendixRESPONDENT QUESTIONS AND RESULTS FOR ALL RESPONDENTSAI Strategy Divide:Bridging the Perception Gap in Retail17Select the top 3 AI applications you believe hold the most promise for the retail sector in the Select the top 3 AI applications you belie

51、ve hold the most promise for the retail sector in the next 5 years.next 5 years.Other(Please Specify)0%Generative AI for Personalized Marketing&Recommendation Engines:Delivers tailored ads and suggests products based on user behavior.45%Enhanced Predictive Analytics:Optimizes demand forecasting,inve

52、ntory management,and stock needs.42%Enhanced Chatbots&Virtual Assistants:Automated tools for customer support and order processing.35%Generative AI for Design:Proposes product designs based on trends and preferences.32%Fraud Detection&Customer Sentiment Analysis:Monitors transactions for anomalies a

53、nd gauges online sentiment.29%Visual Recognition&AR Shopping:Powers virtual try-ons,image searches,and product visualization.27%Enhanced Price Optimization:Adjusts prices based on market conditions and competitor data.24%In-Store Analytics:Tracks in-store behaviors and uses smart shelves for invento

54、ry.23%Voice Search&Conversational Commerce:Enables voice-activated queries and shopping through chatbot dialogues.20%Robotic Process Automation:Enhances manufacturing,transportation,distribution processes and automates routine tasks.15%Not sure about any of these.3%Regardless of your choices in the

55、previous question,does your firm plan on implementing Generative Regardless of your choices in the previous question,does your firm plan on implementing Generative AI for Personalized Marketing,AI for Personalized Marketing,eCommeComm Search,Recommendations,and other consumerSearch,Recommendations,a

56、nd other consumer-facing use facing use cases?cases?Yes67%No11%Not Sure21%When does your firm plan on implementing Generative AI for consumerWhen does your firm plan on implementing Generative AI for consumer-facing use cases?facing use cases?In the next 6 to 12 months65%In the next 1-2 years29%More

57、 than 2 years from now1%Not Sure5%Select the top 3 resources that would benefit you the most on your AI journey in the future.Select the top 3 resources that would benefit you the most on your AI journey in the future.Workshops on AI use cases for Retail56%Seminars and classes on AI technology for R

58、etail44%AI Implementation Use Cases and Case Studies42%Certifications and Standards for AI in Retail38%Expert Consultations35%Regulatory and compliance guides33%Referrals from leaders in similar companies and roles27%Coworkers who will lead the charge23%Other(Please Specify)2%AppendixRESPONDENT QUESTIONS AND RESULTS FOR ALL RESPONDENTS