The Latest Trends Driving Technological Advancements in Retail

69% report an increase in annual revenue attributed to AI adoption, and 72% of retailers using AI experienced a decrease in operating costs.

Adobe Stock 620353347

NVIDIA’s first annual “State of AI in Retail and CPG” survey — conducted among industry professionals — provides insights into the state of AI adoption in retail, its impact on revenue and costs and the emerging trends shaping the future of the industry. With more than 400 respondents globally, including C-suite leaders and other executives, general managers and individual contributors, the survey consisted of questions covering a range of AI topics, top use cases, biggest challenges, infrastructure investment initiatives and deployment models.

Key Takeaways:

  • AI has already proved to be a game-changer for retailers, with 69% reporting an increase in annual revenue attributed to AI adoption. Additionally, 72% of retailers using AI experienced a decrease in operating costs.AI is enhancing operational efficiency, elevating customer experiences and driving growth.
  • The top 5 current AI uses include personalized customer recommendations, store analytics and insights, loss prevention and asset protection, augmented reality experiences and automated marketing content generation.
  • Retailers revealed that AI addressed major challenges like shrinkage, a $112 billion industry problem. This particular use case gained even more prominence among C-suite executives, with 54% ranking it one of their AI applications, highlighting the importance of enhancing security and asset protection strategies. Looking ahead, retailers have ambitious plans for AI adoption.
  • The survey showed that retailers are looking to transform customer experiences using generative AI, enhance marketing and content generation, expand AI and generative AI infrastructure investments as well as increase the use of mobile applications to converge the digital and physical shopping experience.
  • 64% indicated that they intended to expand their AI infrastructure investments in the upcoming 18 months. Thirty-four percent of those respondents planned on increasing investments by more than 15%, reflecting a strong commitment to AI.
  • Retailers recognized the transformative potential of generative AI, with 86% expressing a desire to use it to enhance customer experiences. Respondents acknowledged that incorporating AI into business practices and solutions could revolutionize customer engagement, optimize marketing strategies and streamline operational processes.
  • The results showed that ecommerce was the most used channel, with 79% of retailers actively participating. Mobile applications also gained traction, with over half of retailers using them to bridge the gap between digital and physical shopping experiences. Despite the rise in digital shopping, 30% of respondents say physical stores have the biggest revenue growth opportunity (ranked 2nd beyond ecommerce) and remain the channel with the most AI use cases for retailers.
  • Over 60% of respondents plan to boost their AI investments in the next 18 months. This commitment reflects the industry’s recognition of the technology’s potential to enhance operational efficiency, reduce costs, elevate customer experiences and drive growth.