• by Ray Schultz , Columnist, March 18, 2024

A surprising 93% of retailers are using AI for some kind of personalization, including personalized email copy and product recommendations, according to Retail Roadblock: Lack of Data Strategy Stands in the Way Of Generative AI Progress, a multi-country study released on Monday by Salesforce and the Retail AI Council. 

But data problems are holding retailers back. For instance, only 17% have a complete single view of their customers. And 49% are in the earliest stages of building or considering the creation of a complete customer data profile.  

Moreover, only 50% are able to fully comply with data-security standards and data-privacy regulations. And 50% say bias is a concern, while 38% cite hallucinations and 35% list toxicity as major issues.

While 67% are able to capture customer data, only 39% have the capability to clean data, while 42% can harmonize that data.   

Despite all that, 81% of retailers have a dedicated AI budget, with 50% of that assigned to generative AI. And 62% maintain guidelines regarding the ethical use of AI — i.e., transparency, data security and commitments around trustworthy and unbiased outputs. 

“The AI revolution is about data, trust, and customer experience,” says Rob Garf, general manager of retail and consumer goods at Salesforce. 

Garf adds: “Looking at AI in isolation, without understanding these elements as a package, will hurt a retailer’s ability to build loyalty and improve customer relationships.” 

The Retail AI Council and Salesforce surveyed 1,390 decision makers in the retail industry in Canada, the United States, France, Germany, Italy, Spain, the United Kingdom, and Australia in December 2023. 

They survey found that the big three generative AI uses are customer service, marketing and store operations. The second most critical use case is creating conversational digital shopping assistants to recommend products to shoppers based on natural-language prompts, Salesforce writes. 

“In today’s retail landscape, AI isn’t just changing the game — it’s reshaping the entire playbook,” says Jenna Posner, chief digital officer of Solo Brands and vice chair of the Retail AI Council. “It isn’t only a backstage assistant to merchants, it’s also the emerging co-star in the customer’s shopping journey.” 

Posner continues: “AI is now the imperative for anticipating needs, tailoring experiences, and transforming shopping from a transactional chore into a personalized and evolving adventure.”