What’s the State of AI Adoption in Retail and CPG?
Artificial intelligence (AI) is the driving force behind so much of the technological advancement in the grocery industry, and software company NVIDIA is taking a closer look at its adoption in retail and CPG. NVIDIA’s inaugural “State of AI in Retail and CPG” survey was conducted among more than 400 industry professionals around the world and takes a closer look at not only AI adoption, but also its impact on revenue and costs and emerging trends in the space.
While AI adoption varies widely among retailers and CPG producers, 69% of respondents reported an increase in annual revenue that was attributed to adoption of the technology, and 72% of retailers using AI said they saw a decrease in operating costs.
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As for the top five current AI uses, respondents reported using it for:
- Personalized customer recommendations
- Store analytics and insights
- Loss prevention and asset protection
- Augmented reality experiences
- Automated marketing content generation
Some 64% of survey respondents said they intend to expand their AI infrastructure investments in the next 18 months, and 34% of them plan to increase investments by more than 15%. An impressive 86% plan to use generative AI (GenAI) in an effort to enhance customer experiences.
“This commitment reflects the industry’s recognition of the technology’s potential to enhance operational efficiency, reduce costs, elevate customer experiences and drive growth,” wrote Cynthia Countouris, director of product marketing for retail, CPG and QSR at NVIDIA, in a company blog post.
Many survey respondents have big plans for AI adoption, including using GenAI to transform the customer experience and enhance marketing and content generation. Other areas retailers plan to explore include ways to overcome challenges related to inadequate technology and lack of AI talent, ensuring data privacy and protection in generative AI adoption, and leveraging AI for brick-and-mortar stores.
Additionally, the survey found that many retailers are using AI to ensure an effective omnichannel approach that integrates online and offline channels to create a consistent customer experience. Unsurprisingly, e-commerce is the most used channel, with 79% of retailers actively participating, while half of retailers are investing more in AI geared toward mobile applications.
Physical stores, however, remain the channel with the most AI use cases for retailers. “Given the emphasis on intelligent stores and their central role in the omnichannel experience, use cases such as store analytics and loss prevention will continue to be critical investments,” Countouris wrote.
