Sudeshna Dutta, Co-Founder & Executive VP, Absolutdata who helps enterprises to achieve business growth. Here, she talks to us about some challenges that exist in bringing offline retail onboard to digital platforms
HOW LONG DO YOU THINK IT WILL TAKE INDIAN OFFLINE RETAILERS TO BECOME FULLY Al-ENABLED ONLINE RETAILERS? WHAT ARE THE CHALLENGES IN THIS?
I personally believe that the Indian retail sector is well-positioned in the global market and boasts a massive growth potential. The sector has been bolstered by healthy economic growth, changing demographics, increasing disposable incomes, urbanization, and a higher consumer confidence in the past few years. Growing digital penetration along with structural reforms have particularly enhanced the traction of the e-commerce segment in our country. Several innovative approaches, for instance hyperlocal delivery models, have attracted a large chunk of offline retailers to the digital domain. On the other hand, local businesses are also expanding their reach by tapping the online channel. As our nation continues its digital transformation, more offline retailers will join the bandwagon to improve their business prospects and profitability,. AI-based solutions come across as the next logical step in this regard.
Giving a precise timeline would be a bit challenging because there are a number of dynamics involved. However, one thing can be said for sure. If the
entire retail market adopts Al technology, the retail industry will usher in a new era within the next 4-5 years.
Some of the challenges involved in the adoption of AI tools and techniques are as follows:
• Budget and planning cycles: The ever-evolving AI offerings cannot fit in typical retail IT budgets which leaves the future of such projects on the CIO’s limited discretionary budget spend. On the other hand, most retailers are risk-averse and look for inspiration before they adopt cutting-edge technologies, thereby making speculative ROI decisions difficult.
• Nature of the underlying technology: The technology is changing so quickly that it’s hard to place a bet without worrying that the next great application is right around the corner. I think we’ll see more pilots and experiments over the next few years as the technology matures.
• Lack of confidence in technology: There are several retailers both online and offline who have reported huge improvements in sales by making minor changes. But the retail sector is known to be typically averse to change, even if a competitor is gaining ground. Thus, AI investments and deployments take time to reap measurable benefits.
• Customers’ inclination towards in-person shopping experience: At times, there is a noticeable ingrained preference to make in-store purchases. While AI works great to create tailored, seamless, omnichannel experiences, many customers in India prefer an element of human interaction. A challenge that retailers may face is investing too much in AI and creating an experience that feels unreal and far displaced from the in-person experiences that many, especially older generations are accustomed to and prefer.
• Fear of getting replaced: There have been too many dramatic “The robots will take your job” stories. Moreover, people working in an industry that’s already experiencing significant challenges probably find their futures already uncertain enough. But the reality is, AI is nowhere near the point where it can replace a human, although it can assist humans to do their jobs more efficiently.
• Confusion over data usage: AI is linked to data. It is all about having accurate, dean, and organized data and how it is being used. In reality, retailers expect everything to be implemented by simply using any expensive software. More than half of the retailers are unable to access data via an AI-based solution, which is detrimental to the functioning of AI itself. Besides, transparency and proper use of the data is paramount to creating confidence (and loyalty) with a customer.