That’s according to research from Peak, in their new ‘AI Opportunity for Retail’ report.
The report argues that despite seemingly gloomy retail growth predictions, the industry holds great potential, as it claims total retail sales across the industry are actually at their highest ever point. This is down to ecommerce success, with fashion brands showing particularly impressive growth.
The research also found that the median gross profit margin for companies that are using AI was 50% higher than those who aren’t, at 48% versus 32%. Examples of AI in retail include a ‘recommended products’ feature, using predictive software to manage inventories, targeted advertising, and chatbot customer care.
Peak.ai explains how AI can help retailers:
- AI drives business growth – Peak.ai analysed e-commerce companies with 50-249 employees that were turning over more than £10m. On average, those companies using AI enjoyed an 18% YoY sales growth in 2017, a massive 30% faster than companies who were not using AI (who grew at 14%).
- AI increases profit margins -Among those companies, the median gross profit margin for companies that are using AI was 50% higher than those who aren’t (48% vs 32%)
- AI improves inventories – The median number of stock days for companies that are using AI in the sample was 43: a 9% reduction on the 47 median stock days of companies not using AI.
Will Dutton, head of customer success at Peak.ai, says: “Not only is artificial intelligence no longer inaccessible, its practical applications span the product and service cycle, from development to customer service interactions. As with any new technology, the key for businesses is to approach artificial intelligence questioning if and how it could be used to achieve their business goals.
“If you’re not already, then take time to find out how artificial intelligence is being applied for retailers like you. What once appeared to be an abstract, complicated and expensive technology will soon become your most valued business capability.”