Diving brief:
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More than half of retail and consumer 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 were considering investing in AI for customer service and user experience (39.2%) and supply chain management (34 .4%).
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To improve the customer experience, respondents said they plan to invest in buy now, pay later programs (37.2%), upgraded storefronts (36.4%), services same-day delivery (35.6%), hiring more employees (34.8%), automated services. (29.6%) and self-checkouts (27.2%), according to the survey. The executives surveyed represent retailers and consumer goods companies generating between $25 million and $300 million in revenue.
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While half of respondents expected their sales to remain the same in 2024 compared to last year, nearly 40% expect their sales to increase this year, according to the survey results.
Dive overview:
The Carl Marks Advisors survey demonstrates retailers’ continued investment in AI as the industry attempts to establish best practices. In November, the National Retail Federation presented his four principles for the use of AI in retail, including customer engagement and trust, governance and risk management, workforce applications and business partner accountability.
While the NRF aims to encourage responsible use of AI among retailers, major online retailers are already deploying the technology. In September, eBay unveiled its “magic listing” tool, which summarizes product details using AI. The same month, Amazon launched a tool which helps merchants create product descriptions with AI.
Meanwhile, large brick-and-mortar retailers have leaned more into AI. Last August, Walmart launched My Assistantan AI-powered generative tool for non-store personnel in the United States. Two months later, the retail giant announced its pilot project for a tool based on AI and augmented reality which helps clients design 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 display review summaries.
As retailers look for ways to impress the customer experience, research suggests that retailers’ focus on same-day delivery may be misguided. A Forrester December Report found that three-quarters of online shoppers in the United States cite free shipping as the most critical factor in choosing where to purchase online. In contrast, nearly half of respondents said same-day delivery has no influence on which retailer they choose.
“With inflation falling and interest rates stabilizing, 2024 presents an exciting opportunity for retailers with the courage to embrace out-of-the-box thinking and innovation,” said Howard Meitiner, Managing Director of Carl Marks Advisors , in a press release. “Retailers who are ready to reevaluate their business model and take the necessary steps to invest in integrated omnichannel experiences should be optimistic about the year ahead. After historically low 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 onshore sourcing – will be rewarded in 2024.”
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