It's widely reported that Amazon and Alibaba's success has come from adoption of intelligent AI models, this is why AI adoption will move to the top of the agenda for many eCommerce businesses next year. McKinsey’s latest report - The State of AI in 2020 - outlines how AI drives revenue amongst other benefits with the key insights outlined below:
Retailers who used AI to optimise saw the most significant revenue gains
In looking at how AI adoption has contributed to improving revenue and then profitability, the report found that retailers that excelled at adopting AI to increase inventory optimisation, pricing accuracy, promotion effectiveness, customer satisfaction and forecast accuracy have the best chance of seeing a 20% uplift to their profitability.
AI solutions are able to do the above in a variety of ways. AI machines, for example, are able to understand what items are close to being out of stock and as a result cease to push them through marketing campaigns, instead shifting focus to those that are in inventory.
AI drives the most significant revenue gains in across different departments
The report also looked at the percentage increase in AI-driven revenue growth year-over-year by department and recognised that it drove significant gains in marketing and sales,, and supply chain management.
AI platforms also have significant influence on customer relationships, pricing, service, support and forecast accuracy, and tend to drive the highest revenue. Optimizing pricing using AI can have an immediate impact on revenue and profitability, for example. This optimisation of performance is seeing businesses reap the benefits with 79% of Marketing and Sales teams achieving year-over-year revenue increases this year based on AI adoption.
High-tech and telecom industries lead AI adoption
It was also found that high-tech and telecom industries lead AI adoption, whilst automotive and assembly sectors are falling behind. This perhaps goes to underline where AI adoption gaps may exist - the idea that whilst there are retailers who are fully utilising and adopting true AI, such as Amazon and Alibaba, we are seeing other retailers being left behind and not making the gains that come with AI adoption. The resulting impact of AI adoption also saw high performing enterprises increase their investments during the pandemic more than their peers.
To learn more about AI adoption and the optimisation benefits it could bring to your platform, contact Cloud.IQ’s eCommerce experts at email@example.com to discuss the ways in which it could accelerate your businesses growth and revenue.