Artificial intelligence can offer retailers great gains, but it will not be their saving grace.
In a note to customers, Morgan Stanley analyst Alex Straton wrote that the AI agent could represent a “total savings opportunity of $ 6 billion” for some of the largest American retailers, increasing the 20% profits by 2026.
The Gap (Gap), Macy’s (M) and Victoria’s Secret (VSCO) class report as “semper” the best placed to grasp the advantages.
The appetite of Wall Street for a history of margin led by AI remains solid, in particular for an industry for a long time plagued by thin benefits and swollen stocks.
Straton’s analysis combines two measures: an “AI” award that models the potential operational cost savings and a “recognition” score of AI according to the frequency to which companies mention AI in transcriptions.
In its area, the bank’s executive estimates about 6 billion dollars in annual savings from agent AI tools such as stock planning, automation chain automation and automated customer service. If it is done, this could add around 200 base points to the margins in the sector.
But not everyone is convinced that mathematics will take place properly. David Swartz, main analyst of Morningstar’s actions, is skeptical about how retailers speak and deploy AI.
“Regarding the figures … This is not something that someone really quantified,” Swartz told Yahoo Finance, citing discussions with the peers of the industry.
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The use of AI is “spoken in different ways,” added Swartz, but “how it saves money over time is a bit difficult to know”.
He has traveled the practical uses of AI, many of which align with the scenarios of Morgan Stanley. Marketing, product recommendations, coupons and even design could all benefit from it, said Swartz. For example, AI could help retailers target customers more precisely and test promotions faster than inherited systems.
Like Morgan Stanley, Swartz argued that internal operations such as stock management could be more significant in the long term, which suggests that AI could help retailers “know how much command and what to order”.
Improving demand prediction could reduce markings and waste – a problem with chronic industry – and materially affect the margins if it is well executed, he added.
So far, however, “AI has had a minimal impact on stock efficiency,” said Straton.
As adoption increases, retailers could see an elevator, but it will probably not transform the industry overnight, SWARTZ warned.
