How generative AI poses issues for many retailers

Generative AI is proving to be both an opportunity and a challenge for retailers.

A new survey of roughly 1,400 retailers from Salesforce and the Retail AI Council finds that global retailers are quickly adopting generative AI to personalize and improve in-store and online shopping experiences, but also frequently struggling with the emerging technology.

Nearly half of respondents are struggling to make their data accessible, while only 42% are connecting their various data silos, which Salesforce says can lead to ineffective or inaccurate AI outputs.

Other notable survey results relating to difficulties many respondents are experiencing with generative AI include:

• Only 17% of respondents reported having a complete, single view of their customers and harnessing their data effectively. Half (49%) are still in the preliminary stages of building or even considering the creation of a complete customer data profile.
• Even though 67% of respondents say they are fully able to capture customer data, only 42% they can harmonize it and 39% say they are fully able to clean that data.
• Many respondents are also struggling with using their data for making data accessible (47%) and decisions (40%).
• Half of respondents say they lack the ability to fully comply with data security standards and data privacy regulations.
• Looking at risks, respondents cite bias (when AI algorithms produce prejudiced results or responses) as the top risk in using generative AI — with half of respondents noting this was a concern for them. In addition to bias, respondents most frequently cited hallucinations (38%) and toxicity (35%) as risks.

Retailers are still adopting generative AI

Despite widespread challenges, respondents are not shying away from deploying generative AI solutions:

• Respondents estimate that 36% of their employees are already using generative AI today, with that number expected to grow to 45% by the end of 2025.
• More than nine-in-10 (93%) of these respondents state they are already using generative AI for some sort of personalization, such as personalized email copy and product recommendations.
• Eight-in-10 (81%) respondents report having a dedicated AI budget, with an average of 50% assigned to generative AI.
• The top three areas where these respondents plan to use generative AI are customer service, marketing, and store operations.
• Respondents are prioritizing customer service use cases, with a desire to augment customer service agents with personalized, automated messages and content to send customers quickly. After customer service, the second most important use case for retailers is creating conversational digital shopping assistants.
• More than six-in-10 (62%) respondents report having guidelines to address transparency, data security, and privacy when it comes to the ethical use of generative AI in technology, as well as commitments around trustworthy and unbiased outputs.

"The AI revolution is about data, trust, and customer experience," said Rob Garf, GM of retail and consumer goods, Salesforce. "Looking at artificial intelligence in isolation, without understanding these elements as a package, will hurt a retailer’s ability to build loyalty and improve customer relationships. This research we’re announcing today aims to help retailers better understand the need for a unified data strategy, the practical applications of generative AI and how that can be used to enhance the experience for both shoppers and associates."  

The Retail AI Council and Salesforce surveyed 1,390 decision makers in the retail industry to understand generative AI strategies.