The 2024 Retail AI Readiness Index by IHL Group provides rankings of North American publicly traded retailers on their AI readiness and impact metrics including increased sales, improved gross margins, and improvements in sales and general administrative expenses.

Below are more details about how retailers are ranked:

1. Scoring System:

   • Retailers are scored on a scale of 0-100, with higher scores indicating greater AI readiness[2].

2. Ranking Criteria:

   • The index uses a nine-part algorithm considering factors like:

     • Data maturity

     • Analytics maturity

     • Alignment with AI leaders and key vendors

     • Scale (revenues)

     • Free cash flow

     • Retail segment

     • Cloud score

     • Sales growth

     • Profit growth

3. Top Overall Rankings:

   • Amazon leads in ecommerce with a score of 85.4

   • Walmart tops the Fast-Moving Consumer Goods (FMCG) category with a score of 77.0 [1]

4. Segment Leaders:

   • Apparel/Shoes: Lululemon (top score - 63.2)

   • Hard Goods: Home Depot (65.0)

   • Health and Beauty: CVS (63.0)

   • Restaurant Chains: Chipotle (top score - 56.7)[1]

5. Financial Impact:

   • The index also projects potential financial benefits from AI implementation through 2030[1]

6. FMCG Specific:

   • Walmart is leading FMCG retailers "in a big way" in AI readiness[3]

     .

7. Scope:

   • The index covers the top 207 North American public retailers and restaurants[1].

This ranking system provides a comprehensive view of retailers' AI readiness, considering both technological preparedness and potential financial impact.

What does this mean for the rest of us in the Retail Industry?

Retail enterprises need to proactively explore AI solutions for retail that have proven to deliver concrete P&L impact, specifically sales growth and efficiency gains. Ise AI has already tripled sales and reduced product time to market by 4x for enterprises like Samsonite, Safari Industries (#1 luggage brand in India), and New York and Company.