Amazon and Walmart are the top retailers embracing artificial intelligence (AI) across ecommerce, customer service and marketing, according to a report from California-based Lily AI.

The report, The 2024 Retail AI Index, aims to serve as a benchmark for understanding the impact of AI in retail. Its index ranks the 100 leading retailers and brands that are embracing AI to drive impact across their organisations.

Lily AI is a technology platform specialising in AI for retailers and brands, in partnership with analytics and strategy consultancy Radii Group. The retail AI index is a quantitative meta-analysis of the adoption of AI technologies that benchmarked retailers in the apparel, footwear, beauty and home segments.

“AI continues to empower retail leaders to reshape and modernise the customer experience, and it’s critical for all retailers to understand where they stand,” said Purva Gupta, CEO of Lily AI. “AI is becoming table stakes for retailers who want to stay competitive. Not surprisingly, the biggest of the bigs – Amazon and Walmart – have the resources to invest in AI extensively. But, as we found, even relatively smaller companies, such as Poshmark and Revolve, are taking highly innovative approaches and reaping the benefits.”

The top ten retailers and brands in order in the AI index are Amazon, Walmart, Stitch Fix, Ebay, Wayfair, Sam’s Club, Target, Home Depot, Macy’s and Nike.

Lily’s investigation delved deeper than financial investments to uncover which retailers had thoroughly embedded AI throughout their operations. The index revealed that numerous companies leverage a diverse array of AI technologies, including computer vision and generative AI, to enhance operational efficiency. These retailers and brands are also harnessing AI to bolster decision-making, boost sales through improved customer experiences, and optimise marketing initiatives. This multifaceted approach demonstrates how AI has become integral to various aspects of modern retail, from back-end processes to customer-facing interactions.

While the index’s top performing retailers’ revenues exceed $10bn, the variance in the ranking – from number one Amazon to number 46 BJ’s Wholesale Club – shows the differing public-facing priorities of AI. Both Amazon and Walmart lead in AI adoption and continue to leverage financial resources to invest in advanced AI technologies and talent.

No clear correlation exists between a retailer’s index rank and overall revenue, suggesting retail is still in nascent stages of AI integration and it is too early to see the full financial impact.

Stitch Fix, a retailer with $1.6bn in revenue in 2023, is ranked number three. Stitch Fix stands out because it leverages several AI-based technologies to deliver personalised shopping, building on its original business model of tailored and recommended clothing bundles. Stitch Fix illustrates how mid-size companies can move towards significant AI adoption with focused investments that drive revenue and advance their mission while building on existing data and models.

Some companies with higher AI adoption rankings have acquired or joined in partnerships with AI firms, such as Wayfair’s acquisition of LLM start-up ThirdAI and Ikea’sinvestment in Waaabi, a generative AI autonomous truck company.

Poshmark, another retailer with revenues of under $1bn, came in at 18th. It recently introduced an AI-powered tool called Promoted Closet which uses machine learning to match shoppers’ search terms with promoted listings. Not only does Promoted Closet contribute to a more enjoyable customer journey, but it also increases visibility and sales potential for sellers.

Another retailer with revenues around the billion-dollar mark at $1.1bn, Revolve, came in at 19th. Through its partnership with AI Fashion Week, Revolve sold AI-designed clothing on its web site. It showcased three winning collections created using AI image generators Midjourney and Stable Diffusion.

Lily AI (www.lily.ai) is a female-founded retail technology company empowering retailers and brands by bridging the gap between merchant-speak and customer-speak. Leveraging generative AI, computer vision, natural language processing, and machine and deep learning, Lily AI enhances customer shopping experiences by injecting human-centred language throughout the retail ecosystem to improve search and discovery.

The report can be downloaded at www.lily.ai/2024-retail-ai-index.