The Indian retail industry is set to witness Artificial Intelligence and data-led disruption opportunities, particularly with a 3X growth projected in the e-commerce and organised retail sector by 2024, a Nasscom report said on Thursday.
According to data from the Indian Brand Equity Foundation (IBEF), the overall Indian retail sector is poised to witness a 2X growth by 2024 and will be valued at $1.4 trillion.
While retail in India is dominated by the unorganised sector, as much as 85% in 2019, the opportunity for digitalisation is immense with AI set to play a pivotal role.
This will be even more pertinent as the economy looks to recover amidst COVID-19, by attempting to overcome several unseen challenges, such as broken supply chains and reduced discretionary spend, along with a sudden rise in the demand for contactless deliveries that will require digitised and AI-based solutions.
These solutions can enable predictive demand forecasting, customer hyper-segmentation, supply visibility and the ability to respond to real-time demand signals to build sustainable and adaptable long-term business models in this industry, said the report titled "Indian Retail: AI Imperative to Data-Led Disruptive Growth".
This shift in consumer preferences is creating the need for the digitisation of stores and collaboration with micro, small and medium-sized enterprises across the value chain, which is further accelerating the growth of data-driven retail.
"The retail industry in India has been flourishing with an ever-increasing consumer base and is emerging as one of the most dynamic sectors," Debjani Ghosh, President, Nasscom, said in a statement.
"With the entry of global players and rise in modern retail formats, we are witnessing rapid digital transformation that in turn enhances the entire operational and customer experience."
In the quick-win use cases that have proven successful in business impact, enterprises can prioritise on AI-driven customer service chat bots, counterfeit detection and dynamic pricing tools, as they initiate their AI journey.
Automated store checkouts and robotic warehouse management systems could be big bets for retailers, having high business impact but also requiring higher implementation effort.
In other strategies, even new product planning and development, delivery agent assistance and identifying deals and discounts for the market can prove to be beneficial, said the report.
The research showed that more than 50% retail enterprises believe that customer experience, operational efficiency and revenue growth are priority areas for applying AI in retail, while over 80% of retail enterprises believe that reskilling existing talent is key to driving effective AI adoption.