US retailers embrace transformative potential of AI

The US retail landscape is witnessing a surge of interest in artificial intelligence (AI), with industry giants such as Lowe’s, Walmart, Victoria’s Secret, and Rent the Runway significantly increasing their investments in AI technologies, as reported by Barron’s.

While AI has been a fixture in retail operations for some time, the emergence of generative AI signifies a frontier of innovation, harnessing advanced machine learning to closely emulate human intelligence and generate diverse content.

McKinsey's estimates underscore the potential economic gains from widespread adoption of generative AI, particularly within the retail and consumer-goods sector, promising to revolutionise various operational facets from customer service to supply-chain optimization.

A recent survey by Techstrong.ai published in January revealed that 41 percent of retail business executives are already leveraging AI in various forms, with over half of them identifying six or more use cases. Additionally, findings from NVIDIA's survey indicate that 35 percent of respondents have initiated pilot AI projects.

The optimistic projections align with McKinsey's research last July, suggesting that generative AI could generate 2.6 trillion to 4.4 trillion dollars in global corporate profits annually.

Barron’s data anticipates enhancements in retailer's bottom line and labour costs due to AI integration, albeit urging caution in near-term expectations as retailers refine their strategies. Nonetheless, industry experts foresee a promising trajectory for AI's transformative impact on retail over the next decade.