A recent Honeywell study reveals retail executives around the world are adopting artificial intelligence quickly, with 85% having developed AI capabilities and 53% planning further investment in the coming years.
Retail leaders are using advanced data capture and analytics to power smarter business decisions, to enhance service and to streamline supply chain management, Honeywell stated in its report, The Impact of AI and Data Collection on Retail Transformation. Retailers also are adopting AI to personalize customer experiences, optimize supply chains and improve inventory forecasting for the most part, balancing customer needs with operational efficiency.
A survey conducted by Honeywell and Wakefield Research demonstrated that of those retailers to have adopted AI capabilities, 60% are actively expanding them, while just 1% have yet to embrace or evaluate them. For 89% of the surveyed retail executives, investment in AI is either underway or planned within one to two years.
Retail executives identified three primary motivations for AI implementation, Honeywall noted:
- Achieving hyper-personalized customer experiences, for 34%.
- Optimizing supply chain and last mile operations, for 33%.
- Smarter inventory and demand forecasting, for 33%.
The stated priorities reflect a balanced approach to AI adoption, targeting both customer-facing and back-office improvements, Honeywell reported. In regions such as the United States and Brazil, delivering hyper-personalized experiences is especially critical, with 40% of retailers in each market indicating that as their priority. However, Indian retailers led in AI investment, with 96% committed to it, highlighting a strong appetite for technological innovation. U.S. retailers are at 85%, followed by those in Europe and Brazil at 84% and those in the Middle East at 76%.
Seven of 10 retailers have completely or mostly automated their data capturing processes, Honeywell stated, minimizing manual intervention, reducing errors and accelerating workflows. Eight in 10 executives at companies with mostly or fully automated data capture rated their ability to obtain trusted, high-quality data as very strong, with confidence higher, at 83%, among companies with an IT function dedicated to AI.
Some 46% of executives described their data capture as only “somewhat or a bit” automated, highlighting opportunities for additional investment and optimization. Despite the enthusiasm, retailers face challenges in rolling out AI, with 43% citing the complexity of AI models and regulatory compliance as top concerns, while customer acceptance, at 40%, and workforce adaptation, at 38%, also provide concern. Security risks, at 37%, and vendor trust and reliability, 34%, remain problematic for many.
