5 Steps Retailers Should Take Before Investing in Generative AI

As the retail industry continues to evolve, generative artificial intelligence is emerging as a transformative technology. However, before retailers decide to invest in this technology, it's crucial for them to carefully consider several factors to ensure that their investment aligns with their strategic goals and delivers the expected results. Below are five key steps that retailers should adopt before embarking on their generative AI journey.

Step 1: Conduct a thorough audit of business processes.

The integration of generative AI begins with a comprehensive examination of existing business processes. Retailers must identify areas where generative AI can significantly improve and drive efficiencies. The objective is to identify specific use cases that align with the retailer's mission and vision and where it can provide a strategic advantage by delivering great customer and business value. Generative AI has the potential to revolutionize every aspect of retail, from inventory management to customer experience. However, its application must be strategic and purposeful.

Step 2: Build a robust data infrastructure.

Generative AI relies heavily on data. It utilizes vast amounts of data to generate new insights and innovative solutions. Therefore, retailers must ensure that their organization's data infrastructure is robust and prepared. This includes aspects such as data quality, governance, and security, which form the foundation of any successful generative AI implementation. Without a robust data infrastructure, the full potential of generative AI cannot be realized.

Step 3: Bridge talent gaps.

The successful implementation of generative AI requires a team of skilled professionals, including data scientists, machine learning engineers and software developers. Retailers must assess the capabilities of their current team and identify areas that require reinforcement. Training existing employees, hiring new talent, or collaborating with external partners are potential strategies to plug the gaps. The implementation of generative AI necessitates a cross-functional team with diverse skills and a deep understanding of both AI and retail operations.

Step 4: Implement a governance framework.

Like any technology, generative AI comes with its own set of risks, including privacy, bias and security concerns. Retailers need to establish a robust governance framework and tooling to mitigate these risks, ensuring that the use of AI aligns with ethical standards and regulatory requirements, safeguarding the organization and its customers.

Step 5: Measure the value of your AI investment.

The final consideration is generative AI's return on investment, which includes the cost of implementation, the potential benefits, and the timeline for realizing those benefits. Retailers must have a clear understanding of the ROI to justify the investment. A measurement framework should also be in place to track the ROI and ensure that it aligns with strategic priorities.

The decision to invest in generative AI is a significant one. By carefully considering these five steps, retail leaders can make informed decisions that will enable them to harness the power of generative AI and drive their business forward.

Sudip Mazumder is senior vice president, retail industry lead, North America at Publicis Sapient, a global digital transformation consulting company.