EY India's latest report, 'How much productivity can Generative AI (GenAI) unlock in India? The AIdea of India: 2025', forecasts a significant boost in retail productivity by 35 to 37% within the next five years
An increasing number of organisations in India are adopting GenAI-driven solutions to meet diverse consumer demands, improve efficiency, and boost innovation, enabling growth and adaptability even with resource constraints. EY India's latest report, 'How much productivity can Generative AI (GenAI) unlock in India? The AIdea of India: 2025', forecasts a significant boost in retail productivity by 35 to 37% within the next five years.
48% survey respondents shared that they have already initiated proof of concept (POCs) of using GenAI in their organisations. Around 32% claimed that they are either about to invest in GenAI or have already allocated budgets towards this.
This leap forward is expected to revolutionise insights-driven pricing, promotions, and customer experiences in India's burgeoning retail sector. By integrating GenAI into key areas such as procurement, supply chain, and quality management, the industry is set to become more agile, efficient, and customer focused.
Angshuman Bhattacharya, Partner and National Leader - Consumer Product and Retail Sector, EY-Parthenon says, “GenAI is transforming India's retail, consumer and e-commerce landscape by unlocking unprecedented opportunities for organisations. The trajectory of GenAI suggests that insights-driven pricing, promotions, and enhanced customer experiences will be pivotal, with an anticipated productivity impact ranging from 40% to 45%. Store operations are not far behind, with expected improvements in efficiency of 38% to 40%. As GenAI's journey unfolds, its potential to reimagine consumer interactions, innovate in product development, and redefine sales and marketing within India’s retail landscape is immense. The ongoing evolution of GenAI promises to dismantle technological barriers and pave the way for greater synergy. However, maintaining a balance between automation and human-centric experiences will remain essential for GenAI’s long-term success.”
Within the retail industry we see select functions being prioritised for GenAI implementation with sales being the most important. 52% organisations are focused on enhancing the sales function using GenAI recommendation engines to enhance consumer shopping experiences. 48% are employing GenAI to refine supply chains by optimizing demand forecasting, route planning and warehouse operations, to reduce errors and increase overall efficiency. 40% organizations are leveraging GenAI to advance manufacturing capabilities through improved quality control, digital twins for predictive maintenance, and enhanced worker training programs.
Globally also industry leaders are harnessing the potential of GenAI to redefine their operations. For instance, brands like H&M are enhancing sustainability initiatives, product development, and marketing; Coca-Cola is optimizing delivery routes and stock management; and Amazon Go is enabling cashierless checkout.
In the near future, GenAI is anticipated to enhance personalized marketing, product recommendation engines, and AI-driven market research and consumer insights. In the long-term it is expected to complete the digital transformation of the supply chain, automate manufacturing and logistics, and integrate the use of augmented reality (AR) and virtual reality (VR) in customer experiences, potentially giving rise to new AI-enabled business models.
Overall, the implementation of AI has been successful in organisational cost reduction according to 56% of the respondents, for 44% respondents it has helped increase revenue, and improved customer satisfaction. Given these achievements, the future for the adoption of GenAI shines bright on the retail horizon.
However, the success of GenAI hinges on striking the right balance between automation and human experiences, as well as overcoming skill gaps. GenAI is not just a technological advancement; it is a strategic imperative for businesses aiming to thrive in the dynamic retail landscape. With its capacity to reshape industry practices, GenAI promises a future where operational excellence and customer satisfaction go hand in hand.