EY: Nearly all retail, CPG companies experimenting with generative AI
A new study confirms the ubiquitous presence of generative AI in retail and CPG companies’ technology plans — and investments.
Virtually all (99.6%) respondents are experimenting with generative AI technologies in some capacity, according to the Inaugural Consumer Products and Retail Executive Pulse survey of retail and CPG executives from Ernst & Young LLP (EY). Looking at technology holistically, 90% of respondents say their company has plans to increase its investment in IT or emerging technologies over the next year, with AI and ML or generative AI (31%) heading the list, followed by digital supply chain (21%) and cybersecurity (20%) of the highest priority.
Of respondents experimenting with generative AI, 29% are doing so to remain on the cutting edge of innovation. Four-in-10 (41%) say their company is implementing AI into the consumer experience through employee virtual assistants, with 32% implementing it for product purchase reminders. Overall, slightly more than half (51%) are turning to AI and machine learning (ML) to automate processes that will drive efficiencies due to the current economic environment.
[Read more: Google: Retailers see promise for generative AI]
"New channels and technologies — such as AI, Web3 and the yet to be coined — will continue to emerge, diverge and redefine the retail landscape," said Isaac Krakovsky, EY Americas retail leader. "Retailers need to fortify their foundations in the face of these ever-changing dynamics, and a significant part of that is prioritizing the AI and emerging tech use cases most valuable to the business."
Economy has impact
Almost half of respondents (48%) say the current economic environment has changed their business strategy, with 53% saying that economic and inflationary pressures as well as keeping pace with constantly changing consumer preferences are among their top three pressures keeping them up at night. Another 51% say profitability and margin pressures are a key source of anxiety.
About two-in-three (65%) respondents plan to make significant investments in industry convergence or alternative revenue streams, with 91% planning investments in alternative revenue streams.
Supply chain draws attention
Forty percent of respondents say creating a more efficient supply chain is a core part of their business strategy, only second behind direct-to consumer/omnichannel (42%). Another 35% rank supply chain resilience in their top three areas to invest most in the next year. Finally, where technology is concerned, 21% say digital supply chain is where they plan to increase investment, ranking only behind AI/ML (31%). Three-in-10 (29%) respondents say that transforming the supply chain is going to create the most value in the next 12–18 months.”
Ernst & Young LLP commissioned Atomik Research to conduct an online survey of 255 executives from Fortune 1000+ CPG and retail companies throughout the U.S. All executives surveyed hold a title of VP or higher at their organization. Fieldwork took place between Nov. 22 and Dec. 6, 2023.