Technology, AI To Drive Next Wave Of Growth In Retail: Deloitte–RAI Report
The report also presents some business models for retailers to capitalise on digital transformation opportunities.
Deloitte and the Retailers Association of India have released a joint report that shows how artificial intelligence has transformed from being a tool to becoming the bedrock of growth for India's consumer retail business.
By 2025, 20% of top retailers will use distributed AI systems to achieve holistic results, changing the dynamics of sales, marketing, supply chains and operations, and around 45% marketing leaders plan to invest in generative AI in the next 12–24 months, the report indicated.
"The retail industry is experiencing a significant turning point, driven by changes in the global economic environment that are fundamentally reshaping consumer habits," Anand Ramanathan, consumer products and retail sector leader at Deloitte India, said.
“AI is revolutionising retail, offering personalised recommendations and solutions, with 71% consumers expecting tailored experiences. This signals a move towards experiential engagement beyond mere transactions across consumer touchpoints," Ramanathan said.
With the growing economy bringing more purchasing power and choice to tech-savvy consumers, retailers must craft better shopping experiences. AI, internet of things, mixed reality and advanced analytics have the potential to streamline operations and personalise experiences.
The report presents key trends in retail technologies:
Personalisation And Customer-Experience Enhancement: Retailers are using AI and advanced analytics to provide personalised shopping experiences. AI algorithms analyse customer data to tailor product recommendations, marketing messages and in-store experiences.
Adoption Of IoT And AI To Optimise Supply Chains: IoT devices track inventory in real time, providing valuable data, 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 customer-facing and backend operations. Smart robots are being used for inventory management, cleaning and as shopping assistants. The trend is driven by the need to enhance operational efficiency, reduce labour costs and improve customer service.
Omnichannel Integration: Retailers are integrating AI and IoT technologies to create omnichannel experiences. By synchronising online and offline channels, retailers can offer a consistent and convenient shopping experience for consumers to easily move between online and physical stores.
Data-Driven Decision-Making: Advanced analytics and AI can 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 can identify suspicious transactions and prevent theft, both online and in physical stores, thereby protecting profits and enhancing customer trust.
The report also presents some 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 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: This can help change retail spaces into experience hubs, offering workshops, product demonstrations and community events, driven by customer data insights to enhance engagement and brand loyalty.
