First Insight’s New Study Exposes Strategic Disconnect in AI Adoption Between Retail CEOs and Management Teams, Highlighting Education and Alignment Imperative
Pittsburgh, PA—March 5, 2024—First Insight’s recent study uncovers a surprising divide within the retail sector: CEOs are half as likely to see AI’s predictive analytics as a top 3 promising application compared to their management teams. The report, “AI Perception Gap: Retail CEOs Lag Behind Teams on Predictive Analytics Value,” underscores a pressing need for strengthened AI education and strategic realignment, especially in enterprises generating over $100 million.
“AI’s potential in retail is a game-changer that’s still on the brink of being tapped by retail leaders,” asserts Greg Petro, CEO of First Insight. “Our findings are a wake-up call for CEOs to bridge the gap with their teams, fostering informed strategies and agile data-driven decision-making.”
Key findings include stark differences in perspectives, including:
• The Top 3 Promising AI Applications in the Coming 5 years
• The Top 3 Business Benefits of AI
• The 3 biggest Challenges in AI Implementations
The Top 3 Promising AI Applications in the Coming 5 Years:
Management teams are twice as likely to prioritize “Enhanced Predictive Analytics” for demand forecasting, inventory management, and stock level optimization as a promising AI application compared to CEOs (63% vs. 33%).
Conversely, CEOs place higher value than their teams on:
• Generative AI for Design (44% vs 27%)
• Voice Search & Conversational Commerce (28% vs 17%)
• Fraud Detection & Customer Sentiment Analysis (33% vs 23%)
The Top 3 Business Benefits of AI:
There is a striking three-to-one gap in the recognition of “Innovation” as a vital advantage of AI, with 47% of management teams in agreement, versus a mere 17% of CEOs.
CEOs, however, are more focused on AI for other benefits:
• Cost Savings (56% vs 42%)
• Improved Customer Experience (56% vs. 55%)
• Business transformation (39% vs. 23%)
The 3 Biggest Challenges to AI Implementation:
Divergence continues regarding AI adoption challenges, with management 2x more concerned about “Lack of Infrastructure” (32% vs. 17%) compared to CEOs.
On the other hand, CEOs are preoccupied with building a compelling business case, assessing the risks of AI-driven decisions, and considering the impact on workforce.
• Business case and ROI (39% vs 26%)
• Risk of costly AI-based recommendations and actions (39% vs 21%)
• Fear of workforce impact (33% vs 21%)
Both groups align closely on the challenges of data security and privacy, with a notable majority highlighting this as a concern when implementing AI in retail.
To delve deeper into these insights, download the full report here.
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About First Insight
First Insight, the world’s foremost Voice of the Customer retail solutions provider, empowers business decision-making with actionable consumer insights and artificial intelligence. Serving global retailers, wholesalers and brands, First Insight’s platform fuels revenues and profitability, sharpening strategic decisions across strategy, product, pricing, planning, and marketing. For more information on how First Insight is leading the future of retail decision-making with AI, visit www.firstinsight.com for more information.
Survey Methodology:
First Insight’s findings are based upon a December 2023 survey executed through InsightSUITE, featuring over 160 U.S. retail corporate employees in apparel, footwear, and home décor. Seventy-five respondents represent businesses grossing over $100 million annually. The study juxtaposes CEO responses with non-CEO staff to highlight contrasts and convergences in AI perceptions at the corporate and enterprise tier of retail.
Media Contact:
Berns Communications Group
Michael McMullan
mmcmullan@bcg-pr.com
