National, 28 February 2024: Deloitte and the Retailers Association of India (RAI) today released a joint report titled “Future of Retail: Profitable growth through technology and AI” at the Retail Leadership Summit 2024, advocating how Artificial Intelligence (AI) has transformed from being mere tools to being the bedrock of profitable growth for India’s consumer retail business.
According to the report, by 2025, 20 percent top global retailers will use distributed AI systems to achieve holistic results, revolutionising sales, marketing, supply chains, and operations, and around 45 percent marketing leaders plan to invest in GenAI in the next 12-24 months.
The digital revolution has therefore transformed retail into phygital or omnichannel experiences, disrupting traditional models where brands are using technology to enhance customer experiences and garner greater ROI.
Anand Ramanathan, Consumer Products and Retail Sector Leader, Deloitte India, said, “The retail industry is experiencing a significant turning point, driven by changes in the global economic environment that are fundamentally reshaping consumer habits.
Technology is pivotal in this transformation, no longer merely a tool but the essential foundation upon which retailers must build to meet the expectations of modern consumers and guarantee the success of their investments. AI is revolutionising retail, offering personalised recommendations and solutions, with 71 percent consumers expecting tailored experiences. This signals a move towards experiential engagement beyond mere transactions across consumer touchpoints.
By focusing on enhancing operational efficiency, improving customer experiences, and making informed decisions, retailers can secure a competitive advantage.”
Kumar Rajagopalan, CEO, Retailers Association of India (RAI) said, “As we embrace the digital revolution in India’s retail sector, this report highlights the crucial role of technologies such as AI and IoT. These innovations are not just trends; they are the building blocks for future-proofing our retail industry. The insights in this report not only showcase the transformative power of emerging technologies but also provide a roadmap for retailers to navigate this new era.”
With India’s booming economy bringing more purchasing power and choice to tech-savvy consumers, forward-thinking retailers must craft superior shopping experiences.
AI, IoT, mixed reality, and advanced analytics have the potential to streamline operations, personalise experiences, and even redefine our understanding of what shopping means.
Key trends leading to emerging retail technologies:
- Personalisation and customer experience enhancement: Retailers use AI and advanced analytics to provide personalised shopping experiences. AI algorithms analyse customer data to tailor product recommendations, marketing messages, and even in-store experiences.
- Supply chain optimisation: Adoption of IoT and AI to optimise supply chains. IoT devices track inventory in real time, providing valuable data for inventory management, while AI assists in predictive analytics for demand forecasting. This trend is fuelled by the need for retailers to reduce costs, minimise waste, and respond swiftly to market changes.
- Automation and efficiency: Robotics technology is becoming more prevalent in both customer-facing and backend operations in retail. Smart robots are being used for inventory management, cleaning, and even as shopping assistants. This trend is driven by the need to enhance operational efficiency, reduce labour costs, and improve customer service.
- Omnichannel integration: Retailers integrate AI and IoT technologies to create seamless omnichannel experiences. By synchronising online and offline channels, retailers can offer a consistent and convenient shopping experience, which is important as consumers move fluidly between online stores and physical stores.
- Data-driven decision-making: Advanced analytics and AI enable retailers to make more informed decisions. By analysing large volumes of data, retailers can gain insights into customer behaviour, market trends, and operational efficiency.
- Enhanced security and fraud detection: AI and advanced analytics are employed for security and fraud detection. These technologies can identify suspicious transactions and prevent theft, both online and in physical stores, thereby protecting profits and enhancing customer trust.
The report also enlists the following innovative business models for retailers to stay relevant, capitalise on digital transformation opportunities, and align with shifting consumer preferences:
- Subscription-based services: Include personalised subscription boxes using AI algorithms to predict customer preferences. This fosters customer loyalty and generates steady revenue streams.
- Retail-as-a-Service (RaaS): Enables small brands to use your retail infrastructure, from physical space to e-commerce platforms, creating new revenue streams while providing a broader range of products to customers.
- Experience and community-focused retail: Transforms retail spaces into experience hubs, offering workshops, product demonstrations, and community events, driven by customer data insights to enhance engagement and brand loyalty. Connect customers with shared interests and local vendors.
