Asia-Pacific retailers need AI boost to meet customer expectations

Retailers struggle with AI adoption while aiming to meet the demands of Gen Z consumers.

Despite the widespread marketing hype around AI, retailers are finding it challenging to effectively implement AI technologies, according to Anson Bailey, Head of Consumer & Retail at KPMG in Asia Pacific.

"I think a lot of retailers right now, along with a lot of other businesses here in the region, they're all struggling in terms of how best to use AI," Bailey said. However, he acknowledged that there are already promising use cases, particularly in customer service. "AI is a very fast and efficient way to really, one, understand the consumer, but two, to really see how they can better serve the consumer sets."

The influence of Gen Z consumers, characterised by their tech-savviness and digital mindset, is reshaping retail strategies across the region. "Gen Z consumers are going to be incredibly important to the whole of the retail industry in the weeks, months and years to come," Bailey noted. 

With approximately 300 million Gen Z consumers expected to emerge in China alone, and double that number across the rest of Asia, their impact on the market is profound. "They are not only tech savvy, but they're very digitally minded, and they're also demanding faster, more efficient customer service."

As retailers strive to cater to this demanding demographic, the role of AI becomes even more critical. Bailey believes that AI can significantly enhance customer service, a key expectation of Gen Z consumers. "I do think that AI is going to help us to, you know, provide better, faster, more efficient customer service. But AI is not going to solve everything. AI is going to be an enabler."

"As retailers, we are going to have to provide a better, more immersive in-store experience. We're also going to need to ensure that we provide much better, quicker customer service as well,” he added.

Looking ahead, Bailey is optimistic about the future of retail in the Asia-Pacific region, even amid economic uncertainty and slowed consumer spending. "Well, I think there is going to be a lot of developments in the next couple of years," he says. The continuous evolution of AI technologies, such as the advancements seen with ChatGPT-4, promises to bring about quicker and better customer service.