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Singapore retailers embracing AI but fear loss of personal touch in shopping

Singapore retailers are increasingly adopting AI, but concerns are rising about its impact on personal shopping experiences, a new survey reveals.

Retailers in Singapore are preparing for a significant transformation in customer engagement, driven by artificial intelligence (AI). A recent survey by Twilio, a leading customer engagement platform, reveals that a staggering 93% of Singaporean retailers believe AI will become an essential part of retail operations within the next five years. This survey, conducted during the 2024 National Retail Federation’s Retail’s Big Show Asia Pacific, highlights the growing importance of AI in the retail sector.

The survey also found that 70% of Singapore retailers foresee countless AI applications in the retail industry over the next few years. From personalising customer interactions to optimising inventory management and supply chains, AI is expected to revolutionise various aspects of retail, both online and offline. This growing recognition of AI’s potential pushes retailers to explore its capabilities in enhancing customer experiences and improving operational efficiency.

Early AI adoption brings positive results

Retailers have already begun to see the benefits of AI in driving business success. One notable example is Trade Me, New Zealand’s largest online auction platform. By utilising AI-powered predictive models, Trade Me was able to accurately forecast buyer and seller behaviour, enabling the marketing team to launch targeted campaigns across multiple channels without the need for additional data science resources. This led to a significant boost in email and ad campaign performance, as well as improved return on ad spend (ROAS) and operational efficiency.

As more retailers adopt AI, the technology is proving to be a valuable tool for achieving better business outcomes. Predicting customer behaviour and tailoring marketing efforts has become a key advantage in the competitive retail landscape.

Concerns over AI’s impact on personalisation

Despite the widespread adoption of AI, Singaporean retailers are concerned about its potential downsides. According to the survey, 71% of retailers fear that AI-powered chatbots and automated systems could lead to more impersonal shopping experiences. As AI becomes more integrated into retail operations, finding the right balance between scalability and personalisation is becoming a critical challenge.

Retailers recognise that delivering personalised experiences is crucial, especially as consumers increasingly expect brands to provide tailored and even hyper-personalised interactions. To address these concerns, nearly half (45%) of retailers are prioritising customer data to ensure they can maintain a personalised touch in their engagements.

Nicholas Kontopoulos, Vice President of Marketing for Asia Pacific & Japan at Twilio, emphasised the importance of transparency in AI usage. He stated, “As more retailers employ AI throughout their business, they have to anchor their strategies and operations in transparency and demonstrate how they will use the data responsibly and ethically. This includes communicating their data policies clearly, informing their customers about how their data is being collected, and providing them with mechanisms to exercise privacy rights. Brands will also need to demonstrate how data is used to create tangible value and integrate their data to unlock deeper insights and deliver truly personalised experiences.”

As the retail industry continues to evolve with AI, retailers will need to navigate the complexities of personalisation and scalability. By leveraging customer data responsibly and maintaining a transparent approach, retailers can harness the power of AI to enhance customer engagement while preserving the personal touch that shoppers value.

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