Retailers must embrace artificial intelligence (AI) to keep costs down, improve their competitiveness and meet the changing needs of consumers, according to a senior executive at Microsoft, the tech firm.
Raj Raguneethan, regional business lead, retail and consumer goods at Microsoft Asia, said many retailers in the region are unaware of the power of AI technology to raise their game and that those who do not take AI seriously face a bleak future.
He was speaking to Inside Retail Asia last week, which had been invited to Microsoft’s experience centre in Singapore where AI-driven technology is developed.
“To stay competitive, a shift to intelligent retail is required to add ease, convenience, customisation and automation – across business processes and operations, customer experiences, and the very products and services offered,” he said.
“This can be done by turning to cloud and AI tools as the underlying, connective tissue for digitisation and business transformation,” he added, while emphasising that the issue is important enough for AI strategies to be discussed at board level.
“This is no longer a topic or initiative that sits under the CFO or IT leader, it sits at the board level. And the CEO and the board and the senior leadership should have [an AI] strategy defined as part of their company’s overall business strategy,” said Raguneethan.
His comments came shortly after Microsoft Asia and IDC Asia/Pacific released the findings of a survey of more than 1,600 business leaders across 15 APAC markets.
The study, entitled Future Ready Business: Assessing Asia-Pacific’s Retail Sector with AI, claimed that retail organisations that have adopted AI are already seeing improvements of 16% to 19% in customer engagement, business intelligence, profit margins, competitiveness and innovation.
Furthermore, APAC retail organisations expect AI to deliver further improvement of between 37% to 44% across these commercial metrics by the end of 2021.
Yet even though 71% of decision-makers in the retail sector believe AI is instrumental to their organisation’s competitiveness over the next three years, around two-thirds (67%) still have not incorporated the technology into their business strategies.
For Raguneethan, this suggests that the biggest barrier to more rapid adoption of AI in retail is because too few people working in the sector fully understand the maturity of AI technology as it has developed today.
“The retailers who are not using AI today are missing out significantly on this differentiation or competitive advantage,” he said.
Sourced from Inside Retail Asia; additional content by WARC staff