More than eight in 10 Canadian retail executives say they must invest in generative AI to stay competitive, while almost nine in 10 say AI can better inform marketing campaigns.

These figures come from the latest research by KPMG, which surveyed 135 Canadian retail executives spanning multiple sectors.

The data reveals that 86% of respondents say generative AI can personalize shopping experiences, and 88% agreed that tech can create “stunning visuals for product launches and reduce photography costs.” However, 78% expressed concern about how consumers would respond to AI-generated imagery.

The KPMG survey shows that 81% of Canadian retail executives believes they need to shift to a generative AI operating model in the next 12 months to stay competitive.

The data shows that 39% claim they already have a generative AI solution of some sort in place at their organization, while the same number is planning to implement their first generative AI solution within the next six months.

The most common uses for generative AI among retail respondents include detecting fraud by raising red flags for suspicious transactions (69%), predicting product demand and optimizing inventory levels (68%), offering personalized product recommendations in customer-tailored conversation styles (67%) and powering product search engines by making it easier to understand customer search inquiries (67%).

According to Kostya Polyakov, partner and national industry leader of KPMG in Canada’s consumer and retail practice, while it’s clear C-Suite executives in retail see AI as critical to the future of their businesses, the challenge is identifying use cases that add value to organizations since there are myriad ways retailers can use the technology to become more efficient, productive and profitable.

The one in five major retailers not yet utilizing or planning to use generative AI this year, Polyakov says, face a “huge competitive disadvantage” as generative AI is now table stakes for Canadian retailers.