Flawed data, lack of trust hinders AI integration in retail industry

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A new study from Salesforce and Retail AI Council, which involved 1,400 retail industry decision-makers, indicated a significant difference between the enthusiasm for artificial intelligence and its real-world implementation. The report shows less than favoring results for AI in retail, warning about the trust gap and inaccuracy of AI-driven insights.

Flawed data strategies and trust issues are the main reasons for AI’s slow progress in the retail industry

The report also highlights that generative AI will shape the future of retail with an estimated $9.2 trillion impact by 2029. However, there is still skepticism among consumers regarding these technologies. Within the study, just 13% of the decision-makers showed confidence in ethical AI usage while 63% expressed concern about potential biases in AI-generated results.

“The AI revolution is about data, trust, and customer experience. Looking at AI in isolation, without understanding these elements as a package, will hurt a retailer’s ability to build loyalty and improve customer relationships,” Rob Garf said. He further stated “If you look at AI as an individual element without looking at them as all part of one package… it’s very difficult to be a great retailer moving forward.”

Presently, 93% of retailers are leveraging artificial intelligence (AI) technology to personalize their customers’ experiences such as creating personalized emails or recommending products for sale.

Data cleaning, ethical AI usage, and data harmonization challenges are issues that need resolving

However, most companies are still in the nascent stages of preparing data for effective use by AI systems, according to the survey. Only 17% claim to have a complete view of customer data while challenges related to data cleaning (39%) and harmonization (42%) persist.

As such, filling the gap between strong data strategies and transparent AI usage within ethical frameworks becomes crucial for all retailers incorporating artificial intelligence into their operations. If AI service providers manage to resolve these issues, only then will the organizations realize the transformative powers brought about by this technology. Within their respective industries, AI will unlock multitrillion-dollar opportunities across different retail channels.

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