The retail industry is poised for innovation. Nonetheless, the IDC reports that a staggering 60% of shops have yet to implement artificial intelligence (AI), one in all the fastest-growing technologies on the planet. 

AI provides ample opportunities and advantages for retailers to enhance their operations, but implementation comes with its justifiable share of challenges. Will retailers overcome these setbacks to change into more tech-driven and competitive?

Advantages of AI in Retail

Retailers can expect to reap several advantages by implementing AI-based solutions into their business models. For instance, AI may also help retailers improve customer support and experience, increase efficiency and productivity, and ultimately enhance profitability. 

Organizations within the retail space may even give you the chance to garner recent customers in the event that they tackle an attitude of innovation. That is crucial, especially because the e-commerce industry grows rapidly and competition becomes fiercer.

Consider how instrumental AI was through the COVID-19 pandemic. Presently, there have been massive changes in consumer spending, increased unemployment rates and material shortages, leaving retailers to struggle with inventory management and provide and demand. 

5 Challenges Retailers Face When Implementing AI

As AI and machine learning (ML), a subset of AI, proliferate, it’s fair to say it is going to change into ubiquitous across industries — retail is not any exception. Nonetheless, implementing AI is not any walk within the park. Retailers may face barriers to AI adoption and implementation. Listed here are a few of them.

1. Employee Displacement

Since AI’s inception and acceptance, it’s no surprise that individuals express concern over whether it is going to result in widespread employee displacement. In big box stores and grocery stores, it’s common to see self-service checkout lanes or robotic custodians cleansing to assist improve the shopper experience. 

If AI continues to evolve, retailers may worry that it is going to displace employees. Nonetheless, it’s change into clear that AI — at its current stage — will likely function a complement for human work. It has yet to achieve a sophisticated level able to eliminating the necessity for people. Still, employee displacement is a priority retailers could have that forestalls them from adopting AI.

2. Fear of Change

Retail is just not the one industry lagging in AI adoption. Several other sectors are slow so as to add AI, and one primary reason for that is the inherent fear of change. Implementing recent technologies is something that each company needs to be willing to do, but that’s not the case. 

Fear of change is enough to forestall retailers from adopting and implementing AI solutions. It could appear too difficult to tackle or would change operations and processes an excessive amount of. 

3. Difficulty Keeping Data Secure

AI systems require massive amounts of information to operate properly. Retail information is generated across multiple platforms and sources, making it difficult to scrub, store and analyze to glean insights. 

Lacking a dedicated IT team or employees with deep knowledge of AI generally is a major barrier to AI implementation. The last item any retailer wants is to spend resources on AI only to have it fail to work effectively. Moreover, retailers must prioritize data security, especially in today’s increasingly threatening cybersecurity environment. 

4. Not Enough ROI

Implementing advanced AI or ML systems is mostly expensive, especially for small or medium-sized businesses (SMBs). Many retailers lack the resources essential to support AI initiatives, though the fee will likely decrease as time goes on and more retailers adopt these solutions. 

Without enough return on investment (ROI), implementing AI may seem to be a waste of time, energy and resources for firms within the retail space. It’s essential for any business, no matter industry, to calculate the potential ROI of a recent technology before implementing it. Retailers that do which will give you the chance to reap the advantages of AI and begin by adopting one or two recent solutions. 

5. Worker Skills Gap

The ultimate challenge retailers face when implementing AI is the worker skills gap. AI continues to be in its infancy, and a lot of the American workforce has little to no information about it. They don’t understand its potential, how it really works, how you can maintain AI-based solutions or why they’re growing in demand. 

Retailers may not give you the chance to succeed with AI solutions without enough employees who’ve strong knowledge of AI and its inner workings. Firms that upskill their employees to grasp AI higher may give you the chance to beat this skills gap and successfully implement and use AI.

The Way forward for AI in Retail

It seems inevitable that AI will change into more common across a big selection of industries, and retail is not any exception. Implementing any recent technology will include its justifiable share of challenges, but many will provide ample advantages for firms that take the jump. 

In retail, firms can improve the shopper experience, be more efficient and boost sales by implementing AI-based solutions. As AI continues evolving, the retail industry and others will proceed benefiting from its capabilities.