Shopping for AI (artificial intelligence)

The company which did the research report - Synchrony

About the company - Synchrony is a premier consumer financial services company delivering customised financing programs across key industries including retail, health, auto, travel and home, along with award-winning consumer banking products.

Area of research - How retailers are putting AI-powered technologies to use

Who did the survey - Oxford Economics in partnership with Synchrony. 

Participants of the survey - 324 executives across seven US retail sub-sectors 

When was the research survey conducted - in late 2018

The main points of discussion in the survey:

1. Retailers embrace artificial intelligence
2. Looking beyond the AI hype
3. Marketplace realities dictate AI purchases
4. Follow the Early Adopters
5. Putting AI to work in retail
6. Facing challenges posed by AI
7. Profits in the picture

Findings of the survey:

1) 66% of retailers expect AI investments to increase profitability within three years.

2) 13% say current applications of AI live up to the hype.

3) 72% say artificial intelligence will be a competitive necessity for their company in the next five years.

4) What factors are most important in shaping your AI investments?

1. 48% Our customer demographics (e.g., merchandise preferences, income)
2. 44% Our brand needs
3. 40% Our mix of online vs. physical locations
4. 38% budget

5) 92% say digital technologies are an important part of their organization’s strategic plans.

6) 90% of Early Adopters see AI as a competitive necessity for their company. They see a bright near future: in three years, two-thirds expect increased profitability, higher average sales, optimized inventory turnover, and higher customer conversion rates from their investments.

7) AI to expand merchandise selection, products and services

1. Company size plays a significant role in how AI is deployed for data collection, with larger retailers 50% more likely than small ones to report meaningful AI to use in customer data capture.
2. Early Adopters are slightly ahead of the curve: more than one-fifth of Early Adopters expect AI’s biggest payoff to be the improvement of merchandise selection, with another 20% primarily expecting improvements in their products and services.
3. Even though 64% of retailers are using AI to capture data, only 40% are using it to predict customer behaviour.
4. AI use is expected to increasingly permeate all areas of the business in the next three years for all survey respondents.

8) Difficulty in prioritizing investments is the top impediment to implementation:

1. Funding- smaller companies are much more likely to say money is the biggest factor shaping their AI investments
2. Technology- nearly half of the large and mid-sized organizations surveyed citing a lack of mature technology as a top challenge
3. Strategic focus- about one-quarter of respondents say difficulty in prioritizing investments is the top impediment to implementation. More than one-third of respondents are hindered by the lack of a clear business benefit from AI investments.
4. Lack of budget and mature technology are ranked the biggest impediments to AI implementation

9) To what extent do you expect your AI investments to deliver value in the following areas over the next three years?

1. Profitability- 66%
2. Revenue growth- 62%
3. Higher customer conversion rates- 58%
4. Ability to compete with larger retailers-58%

10) To make AI investments pay off, retail organizations must:

1. Develop a technology foundation. Invest in the cloud and other tools that will support innovation and emerging technologies like AI.
2. Choose the right AI-enabled technology for given business needs. Chatbots may be the right starting point for one retailer, while RPA may address critical needs at another.
3. Start with the customer. Understanding customer behaviour and needs is a top priority—and customer data is a critical driver of AI performance.
4. Build on innovation in a systematic way. Improved merchandising, products, and services are next-level goals once the fundamentals are in place.

Survey findings show that retailers are making meaningful strides in their digital transformation efforts, with AI-powered technologies an increasing focus. These technologies are a strategic priority and offer solutions to specific business problems for many respondents. Our Early Adopters set the tone and provide a strong example of how best to prioritize organizational AI decisions.

Questions : 

1) What % of retailers expect AI investments to increase profitability within three years?

1. 66%
2. 78%
3. 82%
4. 94%

2) What % say artificial intelligence will be a competitive necessity for their company in the next five years?

1. 61%
2. 72%
3. 84%
4. 48%

3) What % say current applications of AI live up to the hype?

1. 35%
2. 24%
3. 13%
4. 63%

4) What factors are most important in shaping your AI investments? 

1. Budget
2. Brand  needs
3. Customer demographics
4. MixA mix of online vs physical location

5) What % say digital technologies are an important part of their organization’s strategic plans?

1. 65%
2. 84%
3. 28%
4. 92%

6) What % of Early Adopters see AI as a competitive necessity for their company? 

1. 90%
2. 87%
3. 52%
4. 70%

7) Company size plays a significant role in how AI is deployed for data collection, with larger retailers ........ more likely than small ones to report meaningful AI to use in customer data capture.

1. 60%
2. 73%
3. 24%
4. 50%

8) What % of retailers are using AI to capture data?

1. 75%
2. 64%
3. 82%
4. 59%

9) What % of retailers are using Al to predict customer behaviour? 

1. 65%
2. 28%
3. 40%
4. 82%

10) ........ are ranked the biggest impediments to AI implementation.

1. Lack of budget
2. Lack of market readiness
3. Lack of executive focus
4. Lack of clear business benefit

11) About ........ of respondents say difficulty in prioritising investments is the top impediment to implementation.

1. half 
2. ¼
3. ¾
4. None of the above

12) To what extent do respondents expect their AI investments to deliver value in profitability over the next three years?

1. 66%
2. 62%
3. 58%
4. 42%

13) To what extent do respondents expect their AI investments to deliver value in revenue growth over the next three years?

1. 66%
2. 62%
3. 59%
4. 87%

14) To what extent do respondents expect their AI investments to deliver value in a higher customer conversion rate over the next three years?

1. 66%
2. 62%
3. 58%
4. 87%

15) To what extent do respondents expect their AI investments to deliver value the inability to compete with larger retailers over the next three years?

1. 66%
2. 62%
3. 58%
4. 49%

16) The report was done by?

1. Standard chartered
2. Global markets
3. Societe generale
4. Synchrony

17) What is the title of the study report? 

1. Ways of achieving financial goals
2. Shopping for AI
3. Social media and its impact on retail
4. Economic growth

18) When was the report done? 

1. 2020
2. 2016
3. 2018
4. 2017

19) How many participants were included?

1. 234
2. 211
3. 234
4. 324

20) What kind of service is provided by Synchrony? 

1. Auditing
2. Human resource
3. Consumer financial services
4. Investment policies