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.
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