Monday, June 17, 2024

91% of Australian and New Zealand retailers investing in generative AI

Salesforce, the global leader in CRM, has released its latest ‘Connected Shoppers Report’, with the Australian Retailers Association (ARA), revealing how Australia and New Zealand retailers and shoppers are adapting to a new retail landscape – one where retailers are discovering new and creative ways to build shopper loyalty and share of wallet through the power of generative AI.

The new survey findings indicate that the retail industry is again on the precipice of significant disruption, with 91% of retailers in Australia/NZ revealing they are investing in generative artificial intelligence. These findings demonstrate the industry is already adapting to meet the evolving wants and needs of consumers.

Of those consumers leading the way on generative AI-led shopping, millennials have shown the most enthusiasm, with 52% of shoppers within that generation interested in using the technology to source gift ideas.

Key insights of this year’s ‘Connected Shoppers Report’ include:

Generative AI’s impact on retail is coming into focus. Millennials are leading the way for generative AI in retail, with over half (52%) of shoppers expressing interest in using the technology to source gift ideas. However, the hype isn’t limited to this age group, with 31% of all ANZ shoppers admitting they’d be interested in using generative AI to get inspiration for product purchases. In response to the demand, over three-quarters (91%) of ANZ retailers are now investing more than ever in AI.

Social media’s influence ramps up. 53% of ANZ shoppers report purchasing on social media — up from 6% in 2021. This is part of the shift to digital shopping channels: An estimated 42% of transactions will occur over digital channels in 2023, a figure expected to rise to 49% in 2025.

Stores increasingly blur the digital/physical divide. Stores now more than ever function as e-commerce fulfillment centres, with many ANZ retailers offering services like buy-online-pickup-in-store (47% and ship-from-store (63%). 24% of store associates in Australia and New Zealand use mobile devices to complete tasks away from the register.

Loyalty programs get a revamp. ANZ shoppers belong to an average of almost 4 (3.94) loyalty programs — down from 4.08 in 2021. 67% of ANZ retailers offer such programs. Still, relatively few have expanded beyond tried-and-true points-based schemes, leaving ample opportunity to expand into newer models such as tiered or coalition programs.

“Consumers are traversing a number of physical and digital touchpoints throughout the shopping journey – from browsing in stores to buying on social,” says Salesforce Retail VP and General Manager Rob Garf. “Our research shows that generative AI is a game changer for retailers to increase personalisation and decrease friction – ultimately driving loyalty and increasing share of wallet.”

“High-tech and high-touch are becoming vital tools to entice the modern shopper. Today’s customers want it all – a tailored, fast, frictionless shopping experience – and artificial intelligence tools certainly have the potential to improve that experience,” says Australian Retailers Association CEO Paul Zahra.

“In overseas markets, we’re already seeing the uptake of interactive technologies such as the virtual fitting room – and it’s only a matter of time before these reach the Australian retail landscape.

“Social media has become an intrinsic part of the shopping experience. Retailers who use social media in their broader marketing strategies will be best placed to succeed. Likewise, with loyalty and rewards programs. Advancing these incentives is critical to entice and retain customers amid the cost-of-living crisis,” Mr Zahra said.

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