First Insight’s latest study reveals a “strategic disconnect” between retail chief executive officers and their management teams regarding AI’s use and innovations. This disconnect spotlights the need to educate and better align executive leaders.
The report’s authors said the research showed that CEOs are half as likely to see AI’s predictive analytics as a top three promising application compared to their management teams. First Insight’s report, titled “AI Strategy Divide: Bridging the Perception Gap in Retail Leadership,” “underscores a pressing need for strengthened AI education and strategic realignment, especially in enterprises generating over $100 million,” the company said.
The survey showed that management teams “are twice as likely to prioritize ‘Enhanced Predictive Analytics’ for demand forecasting, inventory management, and stock level optimization as a promising AI application compared to CEOs (63 percent versus 33 percent),” the report stated.
With generative AI for design, 44 percent of CEOs said it should be a priority compared to 27 percent of managers. With voice search and conversational commerce, 28 percent of CEOs viewed it as a priority versus 17 percent of managers. When it comes to fraud detection and customer sentiment analysis, 33 percent of CEOs viewed it as a priority compared to 23 percent of management teams.
Regarding business benefits of AI, First Insight said there was “a striking three-to-one gap in the recognition of ‘Innovation’ as a vital advantage of AI, with 47 percent of management teams in agreement, versus a mere 17 percent of CEOs.”
First Insight said, “CEOs, however, are more focused on AI for other benefits,” which include cost savings, improved customer experience, and business transformation. The poll also revealed a disconnect regarding AI adoption challenges, “with management two times more concerned about ‘Lack of Infrastructure’ (32 percent versus 17 percent) compared to CEOs,” the report stated.
“On the other hand, CEOs are preoccupied with building a compelling business case, assessing the risks of AI-driven decisions, and considering the impact on the workforce,” authors of the report said, adding that CEOs were also worried over a lack of an ROI and costly AI-based recommendations and actions. “Both groups align closely on the challenges of data security and privacy, with a notable majority highlighting this as a concern when implementing AI in retail.”
Greg Petro, chief executive officer of First Insight, said AI’s potential in retail “is a game-changer that’s still on the brink of being tapped by retail leaders. Our findings are a wake-up call for CEOs to bridge the gap with their teams, fostering informed strategies and agile data-driven decision-making.”
