U.S. Online Retailers Allocate Approximately Half a Million Dollars on Artificial Intelligence in the Previous Year
Retail executives from large and mid-sized e-commerce companies in the U.S. and Europe have been discussing the potential and limitations of generative AI applications at recent conferences such as The National Retail Federation's Big Show and Shoptalk Spring.
A survey of these executives revealed that nearly a third (30%) reported a slight improvement in their customers' digital experience due to AI. The report, however, suggests mixed results from AI investments, despite significant financial commitment, with U.S. businesses, on average, spending $403,000 over the past year on AI-powered customer experience tools.
Adoption of AI by U.S. businesses was primarily driven by customer service (61%), marketing analysis (60%), automating administrative tasks (42%), translation services (41%), and content creation (40%). Major companies like Amazon, Alibaba, Bank of America, Delta Air Lines, Spotify, Uber, Walmart, H&M, Domino's, and IKEA are leading the way in this area.
Key recent players introducing new generative AI tool developments are major tech firms like Amazon and Alibaba, along with software providers such as Qlik that integrate AI-driven analytics and decision-support features into business solutions.
AI is being piloted in areas like supply chains and personalization by retailers. Walmart, for instance, unveiled Wally, its generative AI tool, last month, which helps merchants enter and analyze data, identify product performance issues, and answer operational questions.
Despite the growing use of AI, the retail industry will continue to rely heavily on a human touch, according to Target CEO Brian Cornell. Dominik Angerer, CEO and co-founder of Storyblok, echoed this sentiment, stating that there is a gap between the transformative potential of AI for digital experiences and the actual results, with improvements being incremental rather than transformative.
The use of AI in retail extends to creating localized ads and speeding up customer service work. L'Oréal Groupe announced its use of Google Imagen 3 and Gemini multimodal models earlier this month to help its marketers build new concepts, create storyboards, and redesign packaging.
Companies are increasingly tapping into generative AI applications for content creation and administrative tasks. However, the race to adopt AI technology is intensifying, with U.S. businesses pouring resources into the technology. The question remains, will the return on investment justify the significant financial commitment, or will the potential of AI remain unrealized?
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