Nvidia: AI Fuels Tech Transformation For Retail And Consumer Packaged Goods

Artificial intelligence is poised for significant growth in the retail industry, according to a new report from Nvidia Corporation .

In conjunction with NRF 2024 activities, Nvidia released its first State of AI in Retail and CPG report on Tuesday. The research shows the growth outlook for AI, with more than 60% of retailers saying they will increase investment in AI infrastructure over the next 18 months.

Incorporating survey results from more than 400 respondents worldwide, including executives and individual investors, the report examines AI topics, use cases, challenges, infrastructure investments and deployment models.

The impact of artificial intelligence on revenue

The study questioned the impact on earnings, which is an important metric to understand. Many retailers operate on thin margins, and implementing technology that doesn't help the bottom line can turn small profits into losses. The survey found that 69% of retail respondents who currently use AI say it has led to an increase in revenue, with 15% saying it has helped increase revenue by more than 15%. with

Artificial intelligence improves operational efficiency

Nvidia goes deeper, saying that the priority of artificial intelligence is to improve performance. 72% of retailers using AI say it has reduced operational costs. In fact, 23% say they have cut spending by more than 15%. This is obviously another important fact as it makes the business more profitable. Most IT projects are about revenue or operational efficiency, so achieving both AI goals makes it almost a no-brainer for retailers.

Main use cases of AI

One of the toughest challenges for organizations to overcome with AI is where to start. The report analyzes key use cases that can help retailers who aren't already using AI to develop a plan. The report says retailers are leveraging a variety of use cases, including demand forecasting, in-store analytics and generative artificial intelligence. The report looked at 30 use cases analyzed in the survey, and 14 were used by more than 20% of respondents.

Shrinkage, a major challenge for retailers estimated at $112 billion annually, is a key focus for AI among retailers, especially executives, with 54% of executives ranking it as the top AI application. How it can improve security and asset protection.

Retailers have a variety of AI use cases, with 64% showing significant commitment to AI and saying they will expand their investment in AI infrastructure over the next 18 months. The report states that 34% of respondents plan to increase investments by more than 15%.

Retailers are using generative AI to improve CX

If AI drives revenue, then AI can be about customer experience. According to Nvidia, generative AI is at the forefront of retail use to improve CX.

Retailers are going beyond personalized recommendations to implement conversational AI, responsive advertising, promotions and pricing, product labeling, cataloging and brand avatars. The report shows that 86% of retailers intend to transform the customer experience through generative artificial intelligence. To get there, 98% say they will invest in AI-generating infrastructure in the next 18 months.

Use an omnichannel approach

The report highlights the importance of retailers adopting an omnichannel approach that integrates online and offline channels for a consistent consumer experience. E-commerce is the dominant channel and is actively used by 79% of retailers. In addition, mobile apps are on the rise, with more than half of retailers using them to bridge the gap between digital and physical shopping.

Despite the rise of digital shopping, 30% of respondents indicated that physical stores offer the most opportunities for revenue growth.

general admission

Nvidia has advanced AI with its technology and has been the strongest advocate in the industry to accelerate market adoption. This report expresses a positive outlook and will lay a good foundation for the development of artificial intelligence in retail. This shows that artificial intelligence has become a part of the retail landscape in a short period of time and will continue to grow rapidly and make significant changes for retailers. But I wonder how the numbers will change over the next few years.

Zeus Keravala is a Senior Analyst at ZK Research, a division of Keravala Consulting.

Image: Sipegi/Pixabay

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