85% of A2000 retailers in Asia-Pacific to invest in GenAI by 2027

Half of A2000 retailers are projected to implement AI-enabled contextualised recommendations by 2028.

About 85% of A2000 retailers in the Asia-Pacific region, excluding Japan, is projected to invest in Generative AI (GenAI) by 2027 to enhance their product data, customer support, and customer experience initiatives, as per the IDC FutureScape: Worldwide Retail 2024 Predictions report.

“This indicates that AI and GenAI have nudged the retail sector to gear up for the coming years where retailers will leverage technology to enhance operational efficiency, customer engagement, and data management,” the report said.

Key predictions indicated that by 2028, half of A2000 retailers are set to implement AI-enabled contextualised recommendations, leading to a projected increase in real-time interactions by 40% and a boost in the overall conversion rate by 15%.

Over 50% of A500 retailers are also expected to leverage AI for contextual ad targeting by 2027, paving the way for next-gen retail media networks.

By 2027, a quarter of A2000 retailers are expected to adopt computer vision technology to streamline self-checkout processes, reducing shrinkage by 75% and improving efficiency in services like Buy Online, Pickup In Store by 25%. 

Additionally, the IDC Global Retail Innovation survey 2023 highlighted GenAI-powered chatbots as a top emerging technology for customer service in the region, foreseeing a hybrid approach to customer service where GenAI chatbots handle routine inquiries and human associates address complex issues. 

“By leveraging GenAI's capabilities, retailers in the Asia/Pacific region can create a more inclusive, culturally sensitive, and personalised customer experience, fostering stronger customer relationships and driving market growth,” the report said.

“AI and GenAI are particularly pivotal in personalising the journey for Asia's "next billion" digital customers, guiding them through online shopping and aiding in product discovery,” it noted.

In addition to AI-driven advancements, the IDC report highlighted other critical trends that retailers should prioritise. By 2024, 30% of A2000 retailers are expected to adopt multilevel loyalty programs, leveraging unified customer data to enhance retention rates and Net Promoter Scores. Additionally, a projected 40% of A2000 retailers aim to ramp up investment in next-gen security technologies by 2025, aiming to mitigate fraud, theft, and cyber threats.

By 2026, half of A2000 retailers will adopt decentralised infrastructure, enhancing data security and control, whilst about 70% will deploy mobile devices and wearables for inventory management, clienteling, and mobile point-of-sale systems.

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Moreover, by 2028, 40% of A2000 grocery supply chains are forecasted to implement intelligent IoT solutions to monitor perishable goods, reducing waste and improving quality, whilst at least 30% of A2000 retailers are anticipated to transition to product experience management SaaS platforms to ensure consistency and enhance customer satisfaction.

“Retailers in Asia/Pacific are steering towards a digital-first approach, with AI and GenAI at the helm of this transformation," said Vijay Sarathi Gollapalli, research Manager, IDC Retail Insights Asia/Pacific.

“These technologies are key to unlocking new levels of customer engagement and operational agility, setting the stage for a future where retail experiences are more personalised, efficient, and resilient," he added.