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    From potential to performance by design

    TCS AI for Business Study–key findings for retail

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    TCS AI for Business Study - Retail Report (29 pgs)

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    Reimagining business with AI

    The latest advances in artificial intelligence (AI) including generative AI have created new opportunities to add greater value across the retail value chain.

     The TCS AI for Business Study shows retail companies are optimistic about AI’s potential and provides fresh insights into how they are building effective AI strategies for their enterprise. It uncovers:

    • The driving factors for AI implementations in the retail industry.
    • How AI is redefining retail.
    • Emerging AI trends in the customer experience.
    • Evolving skills and roles in retail.
    • AI strategies for retail companies.
    • Alignment of AI implementations with business results.

    Download the full report

     

    The transformative power of AI

    Most retail executives surveyed have a positive sentiment toward AI and believe it will significantly impact their entire business.

    the report

    An image depicting the retail executives have a positive sentiment towards AI end period.

    Power of AI

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    Power of AI
    the report

    Yet there’s no consensus on AI adoption strategies and not enough metrics to measure success.

    Current state of AI

    • 60% of corporate functions have in-process or completed AI projects.
    • 33% of corporate functions are planning AI implementations.
    • 82% are more inclined toward using AI for spurring innovation and growth.
    Top AI challenges for retail

    A figure depicting the top three challenges for the retail companies such as short-term thinking, industry standards/regulations, and customers' expectations.

    Surveyed executives identify their main challenges

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    Surveyed executives identify their main challenges
    Top AI challenges for retail

    Challenges around generative AI

    We asked retail executives what their primary concerns are about AI, especially with the advent of generative AI (GenAI). Five strategic challenges are apparent:

    • Digital ecosystem participation
    • Shift toward automation and efficiency
    • Security and privacy concerns
    • Ethical and responsible AI use
    • Talent development and training

    Not enough metrics for ROI

    As the integration of AI into business processes accelerates, measuring the financial return on such an investment becomes increasingly significant. But only 15% of retail executives said they have "good enough" metrics and KPIs for their AI deployments.

    Without adequate KPIs for AI-enabled operations, proving ROI and getting future buy-in will be challenging.

    Key findings—future of AI

    Even in this era of AI, there’s no substitute for human creativity, empathy, and strategic thinking.

    • 60% of retail companies think human strategic decision making and creativity will remain essential to their competitive advantage.

    Most executives believe AI will augment and enhance human capabilities, enabling people to focus on higher-value activities.

    • 47% of retail companies expect most of their employees will be using GenAI on a daily basis in three years.

    Innovation will be a focus for future AI implementations.

    • 60% of Pacesetters, or top-performing retail companies, are focused on using AI to spur innovation. 

    TCS recommendations

    • Overview
    • Short-term
    • Mid-term
    • Long-term
  • Overview
  • Short-term
  • Mid-term
  • Long-term
  • Overview

    For retail companies to get the most from AI, they will require a multi-layered strategy that creates a foundation designed for accelerated productivity, innovation, and performance.

    It will be prudent to consider a short-term, mid-term, and long-term approach for implementation.

    Short-term approach

    To begin with, organizations can focus on a few use case tools. Identifying low-hanging fruits will help demonstrate the value of AI early in the pilot phase and gain business stakeholders’ buy-in. Organizations can take the use cases into production to gain the first-mover advantage, demonstrate the returns on investment, and plan for scale based on the proven benefits and learnings.

    Mid-term approach

    Organizations can identify the business scenarios for AI transformation and expected outcomes. Ensure that the implementation is flawless before eyeing effectiveness. It is recommended to pursue initiatives that are focused not only on productivity but also on revenue multiplier opportunities. 

    Long-term approach

    Organizations can revisit their ROI vs total cost of ownership (TOC) and carefully choose areas for AI implementation. Like with any other technology, monitor usage by business units and functions with a consumption tracker and distribute costs as per usage. Based on the outcome evaluation, know the focus areas to sustain or stop AI implementation.

    About the study

    TCS’ Thought Leadership Institute conducted a double-blind study of approximately 1,272 senior executives with P&L responsibilities in 12 industry sectors across Asia, Europe, Nordics, LATAM, North America, and the United Kingdom and Ireland, with respondents having annual revenue of $5 billion to $100 billion. The retail industry findings are based on feedback from 166 survey respondents.

    This global study examines how CEOs, LOBs, directors, and business line managers prepare their businesses to be AI-ready, focusing on aspects such as their strategy around operations, talent, and future implementation plans. The study provides best practice recommendations based on these insights.

    Related reading

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