Dive Brief:
- Gap is gearing up to explore avenues where AI can boost revenue, such as customer experience and organizational productivity, after laying the groundwork for its strategy last year, executives said during the retailer’s Q4 2024 earnings call.
- In 2024, the company set up a unit dedicated to driving AI innovation across the retailer’s strategic priorities. The efforts were part of Gap’s goal to cultivate a “digital-first organization and mindset,” Gap CEO and President Richard Dickson said.
- “In 2025, we will be developing AI monetization opportunities relative to the consumer experience, product to market, as well as organizational productivity,” Dickson said during the call Thursday. “Having organized the various ways we can use AI to enable value creation, we’re prepared to mobilize against this framework with intention.”
Dive Insight:
Retailers are moving from AI window shopping to focused investments and use cases.
J.C. Penney is using AI to enhance its supply chain after prioritizing data management and hygiene, CIO Sharmeelee Bala told Supply Chain Dive in August. Target, Walmart and others have rolled out generative AI chatbots to help employees gather information. David’s Bridal is focusing its AI efforts on enhancing retail media. Bath & Body Works is plugging AI into the customer experience, another popular use case among an assortment of retailers.
Vendors are also working to drive adoption by tailoring AI capabilities to the industry.
IBM embedded AI business solutions in SAP’s cloud in May 2024 with plans to build industry-specific tools for retail and other sectors. Salesforce launched an AI Use Case Library in September housing more than 100 capabilities targeting 15 sectors.
Nearly 90% of retail and consumer packaged goods companies are piloting or deploying AI in operations, up from 82% in 2023, according to Nvidia data published in January.
Gap’s AI efforts are led by CTO Sven Gerjets, who joined the company last summer after a seven-year stint as EVP and CTO at Mattel. At the toymaker, Gerjets was responsible for technology innovation and implementation including AI, which had a dedicated team to explore applications. Dickson also joined Gap after serving as COO at Mattel.
"We have just started the journey with data science, and I am confident that Sven’s expertise and leadership will put us on the right path to success,” Dickson said when announcing Gerjets' June appointment in a letter to staffers viewed by Retail Dive.
During Gap's Q2 2024 earnings call in August, Dickson said the company was evaluating and assessing its infrastructure, talent and capabilities as it focused on becoming a digital-first retailer.
