Gen AI to boost India’s retail productivity by 37%

Generative AI (Gen AI) is set to revolutionize India’s retail sector, driving significant productivity gains and transforming customer experiences. A new EY India report predicts that Gen AI could boost retail productivity by 35-37% over the next five years, with businesses rapidly adopting AI-driven solutions to enhance pricing, promotions, and operations. As companies invest in Gen AI, the technology is expected to optimize sales, refine supply chains, and improve overall efficiency, positioning AI as a key driver of growth and innovation in the industry.

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Generative AI (Gen AI) is set to transform India’s retail sector, driving a 35-37% productivity boost over the next five years, according to EY India’s latest report, “How much productivity can Generative AI (Gen AI) unlock in India? The AIdea of India: 2025.”

Indian businesses are rapidly adopting Gen AI to enhance pricing, promotions, and customer experiences. The report reveals that 48% of surveyed organisations have already initiated proofs of concept (POCs), while 32% are planning or have allocated budgets for Gen AI investments.

Angshuman Bhattacharya, EY-Parthenon’s Partner and National Leader for Consumer Product and Retail, highlighted that Gen AI is reshaping retail, consumer, and e-commerce landscapes. He projects a 40-45% productivity increase in insights-driven pricing, promotions, and customer experiences, while store operations could see efficiency improvements of 38-40%.

Retailers are integrating Gen AI-powered recommendation engines to improve customer shopping experiences, with 52% of organisations prioritising sales enhancements. Meanwhile, 48% are using Gen AI to optimise supply chains, focusing on demand forecasting, route planning, and warehouse operations. These advancements reduce errors and enhance operational efficiency.

Businesses are already seeing tangible benefits. 56% of respondents reported cost reductions, while 44% experienced revenue growth and improved customer satisfaction due to AI adoption.

With these successes, the report predicts a bright future for Gen AI in retail, as organisations continue leveraging AI-driven innovations to boost efficiency, enhance customer engagement, and maintain competitive agility.