Top

GenAI in Retail: Opportunities Galore, Challenges Remain

  • For retailers to fully embrace the opportunity of advanced technologies like GenAI, solution enablers need to find ways to remove obstacles holding back implementation.
  • There are opportunities left untouched right now to make use of the existing device capabilities and push user engagement further. This is because of long-held beliefs as to how users prefer to engage with their devices and content.
  • There have been instances of technology rollouts being reversed, confirming the need for a careful evaluation of available solutions.

The Location Based Marketing Association (LBMA) recently held its annual RetailLoco conference in Minneapolis, Minnesota. The event brings together experts and stakeholders from across the retail technology ecosystem. This year’s edition showcased GenAI brand activations while underscoring the persistent challenges retailers face in integrating advanced smartphone features and AI across their physical and online shopping experiences.

Opportunities to grow for all

While a cautious approach to AI and GenAI was a theme throughout the event, there were a few interesting implementations highlighted:

  • Burger King Brazil ran a promotion where menu combinations were presented to mobile app users once they scanned their facial expressions.
  • L’Oréal’s Perso at-home assistant integrates Breezometer weather and location information to provide personalized makeup suggestions.
Example of L'Oreal AI assistant.
Image source: Gerrit Schneemann, Counterpoint Research

These activations show the potential of GenAI capabilities to engage customers in new ways. At scale, these types of examples can lead to personalized shopping or dining experiences, previously impossible to deliver.

For retailers to fully embrace the opportunity of advanced technologies like GenAI, AR/VR and network-based positioning, solution enablers need to meet them halfway and find ways to remove most of the obstacles currently holding back implementation:

  • Retailers must prioritize the seamless integration of mobile payments and user-centric experiences.
  • AI-driven solutions possess the capability to enhance operational efficiency, personalize interactions and streamline business processes, be it predictive maintenance in manufacturing or AR-enhanced marketing endeavors.
  • Technology providers must recognize that a one-size-fits-all approach to the deployment of new technologies will not work, and the availability of customizable solutions will be critical for adoption.
  • End users are likely to embrace new technologies if there is a clear benefit for them. This includes sharing location information, downloading specific apps, and changing device use patterns to take advantage of new features.

Fragmentation of backend systems overshadows new technologies’ potential utility 

One of the key themes of the presentations by representatives from companies like Harley Davidson, Glympse and Kroger was that technology availability does not necessarily translate to a clear strategy on how to implement these solutions across mobile apps, online, and retail locations.

A striking example of the lack of utilization of existing features on smartphones is augmented reality (AR) for discovery and guidance within stores. The focus of navigation remains on A-to-B guidance to a store with heavy stress on displaying the famous blue dot on the map, with pedestrian guidance and AR content integration appearing out of favor at this point.

There are opportunities left untouched right now to make use of the existing device capabilities and push user engagement further. This is because of long-held beliefs as to how users prefer to engage with their devices and content. One such point of contention is how users would engage with AR content, and the need to hold up a phone to view it. However, this should be less of an issue now as video content creation across social media is standard behavior for many. Gone are the days when phones were neatly tucked away while on the go.

Another challenge to the full embrace of advanced mobile features appears to be the long tail of proprietary internal systems. Retailers feel inadequately prepared to navigate technologies such as AI, chatbots, AR and VR. Constraints stemming from budgetary limitations, dearth of internal resources and lack of executive endorsement impede their adoption efforts further. While mobile payments, AI and chatbots hold immense promise, retailers grapple with the complexities of implementation.

Kroger feedback loop.
Image source: Gerrit Schneemann, Counterpoint Research

Importantly, there have been instances of technology rollouts being reversed, confirming the need for a careful evaluation of available solutions. Walmart’s reversal on self-checkout stations and findings that Amazon’s touchless shopping experience in physical stores was powered by a large workforce decoding video streams instead of AI are key examples that are likely to cause large organizations to pause and re-evaluate their plans and adjust accordingly.

RetailLoco 2024 served as an interesting snapshot of the status quo and future of retail, where AI and innovation are significant opportunities for all involved in the value chain. However, there are a host of obstacles in the way of faster adoption of the most advanced solutions, driven by an undeniable wariness to over-committing to potentially flawed technologies and the realities of proprietary internal systems, ill-equipped to deal with fast-changing 5G and AI solutions.

Related Posts

Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.