Asia Pacific (APAC) organisations are rushing to jump onto the AI bandwagon, with more than two in five (43%) planning a large investment increase in AI of over 20%, in the next 12 months, according to new research from IDC and SAS.  

The IDC Data and AI Pulse: Asia Pacific 2024 study, commissioned by SAS, also found that despite a strong wave of AI investments, only 18% of APAC businesses are considered AI Leaders, and in Australia, this falls to just 9%, leaving a large gap between those driving long-term transformational change and the AI Followers lacking a clear AI strategy.

“We have seen a surge in AI interest among businesses over the past year. Yet, the reality is AI has been around for a long time. At SAS, we have been specialising in AI for over 25 years. However, since the more recent emergence of generative AI and tools such as ChatGPT, AI has become a ‘shiny new toy’ which all businesses are keen to quickly add to their toolkits,” SAS Australia and New Zealand vice president and managing director, Craig Jennings said.

“AI Leaders integrate AI strategically, prioritising governance, planning, and skills development, whereas Followers tend to lack a clear roadmap, focusing on short-term gains. While short-term AI projects can address immediate challenges, they often lack the depth needed for lasting impact.

“AI Leaders establish robust data governance, invest in upskilling teams, and align AI initiatives with broader business objectives. For retailers, this means AI is not a one-off tool but a strategic asset that powers customer-centric initiatives like hyper-personalised marketing and dynamic pricing. This approach cultivates in stronger customer loyalty, greater operational efficiency, and a competitive advantage.”

Another study finding that stood out for Jennings is the AI skills gap impacting 35% of Australian organisations, yet AI talent development among businesses is critical in driving the scalability of AI investments.

“The country indeed requires more AI coders and data scientists, but there is also another important skill gap in this area that needs solving, and that’s in the executive team. Technical teams have the best chance of succeeding with an AI implementation when it’s based on a well-considered strategy driven by the executive team,” he said.

“Business leaders need to be well versed on AI fundamentals, as well as its challenges, risks and opportunities, in coordinating a robust AI approach in collaboration with the right technology partners.”

While many are excited by the possibility of what can be done with AI, its success in business is contingent on a couple of key factors.

“Most importantly, it comes down to the quality of your data set and its readiness for running AI. This includes where the data sits, its security and scalability, as well as the breadth of data sets and whether they can address the problem that needs solving,” Jennings said.

“Unfortunately, this is where businesses often come unstuck. They’ve jumped on the AI bandwagon with short-term gains front of mind, but AI rollouts require solid foundations and strategic long-term planning for real success.”

There are five key areas for AI in retail, according to Jennings, which include:

  • Personalised marketing: AI-driven insights help retailers tailor campaigns, increasing engagement and boosting conversion rates all year round and during high-stakes sales periods.
  • Accurate demand forecasting: AI models can help to identify and forecast popular products, so retailers can stock accordingly, meeting demand for peak days like Black Friday without overstocking.
  • Responsive customer service: AI-powered chatbots can help to efficiently handle customer enquiries, delivering quick support as well as prompting Customer Service on relevant questions and support, overall improving customer satisfaction (particularly as traffic peaks!).
  • Dynamic pricing adjustments: AI tools can suggest real-time pricing adjustments based on market trends and inventory, allowing retailers to stay competitive, adjust pricing when supplier arrangements change and maintain solid margins.
  • Fraud prevention: AI can assist in monitoring transactions for unusual patterns, adding an extra layer of security during peak periods when scamming events are at their peak.

“When rolled out with a long-term, strategic view, AI can transform businesses by improving staff, customer and partner experiences, while driving innovative thinking and new business opportunities. I urge business leaders to ensure the right foundations and fundamentals are in place, through collaboration with the right technology partner, to ensure investments drive strong returns,” he concluded.