Despite the global retail industry experiencing a slowdown in consumption, India’s retail market is thriving and on path to hit the $1 trillion mark by 2027. This growth is largely attributed to the increasing use of AI and advanced analytics, allowing retailers to collect and analyse vast amounts of data to enhance the overall customer experience and make more informed decisions, according to a joint report by the Boston Consulting Group (BCG) and the Retailers Association of India (RAI).

Although there is significant headroom for improvement across dimensions, Indian retailers have already created a significant impact with analytics and AI, driving growth and profit objectives through multiple use-cases across the retail value chain, as per the ‘₹400 Bn EBITDA Opportunity with Advanced Analytics and AI in Retail’ report.

Despite the global retail industry experiencing a slowdown in consumption, India’s retail market is thriving and on path to hit the $1 trillion mark by 2027. This growth is largely attributed to the increasing use of AI and advanced analytics, according to a joint report by the Boston Consulting Group (BCG) and the Retailers Association of India (RAI).

Deploying a balanced approach between in-house and external resourcing will be crucial for Indian retailers to effectively execute long-term transformation. Change management is the most critical component of this journey and requires more attention from leadership than algorithms and technology. A strong foundation for the transformation journey requires a cohesive approach towards data, tech, and people and processes with change management embedded in the ways of working to deliver sustained value creation, the report emphasised.

The report also provides a roadmap for Indian retailers on how to get started, the right approach, capabilities, and partnerships needed to ensure successful adoption and value realisation.

“Advanced analytics and AI have transformed retail globally and enabled many large retailers to leapfrog competition and build differentiation. Indian retailers also recognise this opportunity and are optimistic about the potential of advanced analytics and AI to create value. If leveraged well and at scale, Indian retailers can unlock INR 400Bn incremental EBITDA with advanced analytics and AI over the next five years,” stated Abheek Singhi, managing director and senior partner at BCG.

“We are seeing a wide spread of use-cases being adopted by Indian retailers across the value-chain. We have seen in our work that it is important to adopt an approach of starting small and scale iteratively. A successful transformation needs more focus around managing people and processes rather than just different algorithms or technologies. Analytics transformation journey, if executed well, will yield enough benefit during its ignition phase to fund the next level of acceleration” said Namit Puri, managing director and partner, BCG.

“Personalisation, accuracy, speed, and anywhere retail is expected in the modern age. Retailers who are able to utilise AI effectively will be the winners as we go forward. There is significant capability for retailers to be more accurate and many of the retailers are on the path, and on a war footing. Consumers can expect better standards of retailing as days go by, and also a much better offering of merchandise and services,” said Kumar Rajagopalan, CEO, RAI.

Fibre2Fashion News Desk (DP)