AI adoption in retail: Opportunities & readiness gaps
Riverbed's latest Global AI & Digital Experience Survey reveals significant insights into the retail sector's adoption of AI and its ongoing challenges.
The survey highlights that 95% of retail leaders consider AI a top priority at the C-Suite level, yet only 40% feel fully prepared to implement AI initiatives presently. Despite this, 96% of business and IT decision-makers in the retail industry believe AI will significantly enhance digital experiences, particularly during high-demand periods like Black Friday and Cyber Monday.
Jim Gargan, Chief Marketing Officer at Riverbed, remarked, "As retailers prepare for seasonal flash sales such as Black Friday and Cyber Monday, the adoption of AI technology is revolutionising the retail sector, offering personalised recommendations and superior shopping experiences. However, leveraging AI to analyse consumer buying behaviour and trends requires access to great data, and our recent study reveals that only 45% of business and IT leaders in Retail organisations rate their data as excellent for accuracy."
The report further indicates that Millennials and Gen Z are at the forefront of AI adoption in retail, underlining the need for alignment between technology strategies and workforce capabilities. Among retail leaders, 71% regard AI as a key strategic priority, with 93% expecting to be fully prepared to implement their AI strategies by 2027. This anticipated readiness level exceeds the overall industry average of 86%.
Despite the optimism surrounding AI, the retail sector continues to grapple with several significant hurdles. A major challenge is the readiness gap, where only 40% of retail leaders believe their organisations are currently prepared for AI implementation. A vast majority, 77%, cited that the evolving nature of AI makes implementation and scaling difficult.
Data quality and security pose further obstacles, with 87% of retail leaders acknowledging the importance of high-quality data for AI. Nonetheless, 72% expressed concern over their data's effectiveness for AI purposes, and there is apprehension around data security risks, as 91% of respondents worry about AI accessing proprietary data.
The survey findings also underscore the sector's transitional phase, with 65% of retail organisations accelerating AI strategy execution and investment in infrastructure and talent. Moreover, industry experts maintain that employing real data, as opposed to synthetic data, is vital for AI's success.
Retail businesses are taking proactive measures to address AI preparedness. For instance, 55% have established dedicated AI teams, and 50% have initiated observability or user experience teams. Recruiting and investing in AI talent is becoming increasingly crucial as the sector seeks to maintain its competitive edge.
AI's role in enhancing digital user experience is evident, as seen in the 91% of retail organisations who believe AI is essential for delivering an improved digital experience. Tools such as chatbots and virtual assistants are being utilised to streamline communications, enhance efficiency, and bolster customer service through 24/7 support capabilities.
"At Riverbed, we're helping our Retail customers close this data gap through a practical AI approach, with an AI-powered platform that offers comprehensive data and visibility across the entire IT environment. As a result, this enhances the employee experience and productivity, which in turn delivers superior customer experiences, ultimately increasing loyalty and sales for retailers," Jim Gargan added.
The study surveyed 1,200 decision-makers from the IT, business, and public sectors across seven countries, including 200 respondents from the retail industry, all of whom have significant annual revenue.
