Dive Brief:
- More than half of retail and consumer packaged goods executives will invest in artificial intelligence tools for marketing (56%) and financial forecasting (52%), according to a new survey sponsored by Carl Marks Advisors. More than a third (34.4%) said they plan to invest in AI for customer service and user experience (39.2%) and supply chain management (34.4%).
- To enhance customer experience, respondents said they planned to invest in buy now, pay later programs (37.2%), modernized storefronts (36.4%), same-day delivery services (35.6%), hiring more employees (34.8%), automated services (29.6%) and self-checkout (27.2%), according to the survey. The executives surveyed represent retailers and CPG firms generating between $25 million and $300 million in revenue.
- While half of the survey respondents expected their sales to remain the same in 2024 compared to last year, nearly 40% anticipate their sales to grow this year, per the survey results.
Dive Insight:
Carl Marks Advisors’ survey signals retailers’ continued investment in AI as the industry tries to establish best practices. In November, the National Retail Federation introduced its four principles for AI usage in retail, including customer engagement and trust, governance and risk management, workforce applications and business partner accountability.
As the NRF aims to steer responsible AI use among retailers, major online retailers are already deploying the technology. In September, eBay unveiled its “magical listing” tool, which summarizes product details using AI. That same month, Amazon launched a tool that assists merchants with creating product descriptions with AI.
Meanwhile, major brick-and-mortar retailers have delved deeper into AI. Last August, Walmart debuted My Assistant, a generative AI-powered tool for non-store staffers in the U.S. Two months later, the retail giant announced its pilot for an AI and augmented reality-driven tool that aids customers in designing their rooms. The retailer is also deploying generative AI to improve its search capabilities, assist shoppers with complex purchases, help customers prioritize product features and show review summaries.
As retailers search for ways to impress customer experience, research suggests that retailers’ focus on same-day delivery may be misguided. A December report from Forrester found that three-quarters of U.S. online shoppers cited free shipping as the most critical factor in choosing where to shop online. By contrast, almost half of survey respondents said that same-day delivery has no influence on which retailer they select.
“With inflation abating and interest rates leveling off, 2024 presents an exciting opportunity for retailers with the courage to embrace out-of-the-box thinking and innovation,” Howard Meitiner, managing director at Carl Marks Advisors, said in a statement. “Retailers who are prepared to re-evaluate their business model and take the necessary steps to invest in integrated omnichannel experiences should be optimistic about the coming year. Following record lows in unemployment and a strong holiday season for retailers now is not the time to be pessimistic. Companies willing to risk trying something different — whether a new strategic partnership or sourcing on-shore — will be rewarded in 2024.”
