Retailers have had access to generative AI tools for more than a year now—time enough for most to see the new technology’s undeniable power, Bain & Co. believes. Even at this early stage, new research from the high-profile consulting firm shows generative AI at scale will rapidly improve productivity, easing the industry-wide pressure on margins through an array of cost savings.
“From conversational search to personalized apps, gen AI is reshaping the retail landscape in a way that is going to be even faster and more transformative than the smart phone or the internet,” said Mikey Vu, a Partner in Bain’s Retail practice. “A year into their journey, retailers have enjoyed some early successes. It will be critical for them to scale these use cases, with a focus on ROI, to keep pace with the evolving expectations of shoppers who are rapidly incorporating generative AI into their daily lives.”
One highly promising use centers on personalizing the customer experience through tools such as AI-powered conversational shopping assistants, enhanced search and localized shopper recommendations. Bain found these uses at scale have the potential to increase a retailer’s revenue by 5-10%.
Retailers are also likely to have experimented already with using generative AI to enhance and streamline their marketing efforts—with promising results. Bigger rewards now lie in store for executive teams that wrap these initiatives into a broader push to automate generation of marketing collateral in areas such as translation and repurposing of content, social media and the creation of dynamic and personalized landing pages.
In addition, Bain estimates generative AI enhancements that reshape the way retail employees work on the front line, in warehouses and at HQ could boost productivity up to 25%. This includes automated inventory checks and restocking alerts, and search assistants for real-time problem resolution.
To fully capitalize on the promise of AI, retailers must ensure that their rollout passes tests in these three areas: Change management, democratization and talent, Bain says. “As best practices in gen AI implementation will often date quickly, retailers must help workers continually update their new skills in tech-related roles and across the organization by focusing on upskilling existing employees,” the management consultant concludes.
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