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The artificial intelligence revolution in retail and consumer products


Initial improvements can include reduced costs. Down the road? Intelligent automation could create business processes for retailers and consumer brands.

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Retail and consumer products organizations are entering a new phase of technological innovation, with intelligent automation at its core. The ramifications are profound, offering a host of previously unimaginable capabilities—from automatically rerouting shipments to bypass bad weather, to personalizing in-store services based on analysis of a customer’s facial expressions.

Brands and retailers are already adopting AI-powered intelligent automation at a breathtaking pace—and that process is about to accelerate. Over 80 percent of executives in both the retail and consumer products industries expect their companies to be using intelligent automation by 2021, according to our new IBM Institute for Business Value (IBV) study, developed in collaboration with the National Retail Federation.

What’s more, 40 percent say their organizations are already engaged in some form of intelligent automation. Companies that aren’t experimenting with this capability risk falling behind and need to move quickly if they hope to remain competitive.

Why the surge in participation? Intelligent automation represents a major technological breakthrough that has the potential to not just improve, but to transform the way companies do business. In intelligent automation, artificial intelligence (AI) is infused into automation, enabling machines to learn and generate recommendations, and to make autonomous decisions and self-remediate over time.

Our research found that retail and brand executives have high expectations that intelligent automation can boost organizations’ bottom lines. Respondents anticipate these capabilities can help reduce operating costs by an average of up to 7 percent, while increasing annual revenue growth by up to 10 percent—four times the average revenue growth in consumer products for 2017 and two times the forecasted growth in retail for 2018.¹

This paper takes a deeper look into impacts within industries and across organizational functions to determine how retailers and brands can address the upcoming challenges and opportunities intelligent automation creates.

¹IBM Institute for Business Value research; Ellet, Linda K. “Growth among consumer goods companies continues to slow.” KPMG website. June 14, 2018. Accessed December 10, 2018. https://home.kpmg.com/uk/en/home/media/press-releases/2018/06/growth-among-consumer-goods-companies-continues-to-slow.html; Anders, Melissa. “Retail Industry Expects More Sales Growth In 2018.” Forbes. February 8, 2018. https://www.forbes.com/sites/melissaanders/2018/02/08/retail-industry-poised-for-more-sales-growth-in-2018/#6eead5da4fa7

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Meet the authors:

Karl Haller

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, Global Leader, Consumer Center of Competence, IBM Global Business Services;
Jim Lee

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, Associate Partner, Distribution Sector, IBM Global Business Services;
Gene Chao, Global Vice President and General Manager for IBM Automation; Christopher K. Wong

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, Vice President of Strategy and Ecosystem, IBM Global Consumer Industry;
Lance Tyson

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, Associate Partner for Supply Chain and Retail Operations, IBM Global Business Services;
Jane Cheung

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, Global Leader for Consumer Products, IBM Institute for Business Value

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