What Comes Next for Generative AI in Retail? Here’s What the Experts Say
The success of OpenAI’s ChatGPT is putting pressure on executives in nearly every industry to invest in generative AI technology.
No longer reserved for strictly marketing or communications tasks, generative AI is now being integrated into aspects of daily retail, supply chain, and customer service operations.
Retailers are facing tough decisions over when, and how much to invest in a technology that’s still relatively new and untested.
Although generative AI shows great potential as a solution for retailers that hope to create immersive shopping experiences, as well as streamline customer support and provide more personalized recommendations based on past purchasing histories and browser behavior, there are still many questions about how useful this technology is in its current form and how effectively it can actually help businesses meet broader objectives. Questions are also emerging about the potential return on investment that retailers can expect, given the sometimes high startup costs when investing in AI technology and integrating existing systems in-house.
“Businesses should take into account the overall return on investment that some of these AI/AR products can yield,” says Jennifer Stevenson, senior product director of marketing at Uberall, a digital platform for brick and mortar businesses. “When used correctly, these machine learning softwares can help bolster the customer experience and build customer loyalty. They can also help improve efficiency by learning from a retailer’s current business model and developing ways to enhance it, which can ultimately lead to increased revenue and the elimination of unnecessary costs.”
Just last month, the retail AI company Standard AI made headlines when it acquired the self-checkout vendor SKIP. With the acquisition, Standard AI will soon be able to communicate information about its computer vision payment options on the screens of traditional self-checkout kiosks.
Stevenson says retailers stand to the gain the most from AI when they can incorporate the technology to give customers more personalized shopping experiences. For example, retailers can learn from a customer’s past and current shopping habits to offer the best products and services that are unique to that consumer. Generative AI technology like OpenAI’s ChatGPT can also be programmed to present offers and recommendations based on past purchases, or it can even initiate conversations and provide personalized recommendations based on a customer’s response.
The technology is not without its downsides, though, and Stevenson cautions that there are often significant time and cost investments required to train human employees to efficiently utilize AI.
“Employees are often skeptical to truly utilize AI technology because they fear it may ultimately replace them. They might also think the tools are more complicated than they really are,” Stevenson says. “The best way to solve this problem is to provide thorough training that will ensure all employees – including the ones that may have a more difficult time embracing this software – are getting the knowledge they need to excel … Retail leaders should be empathetic to employee concerns and provide clear answers that highlight how this technology can free up time to focus on building strategic relationships with customers.”
While it’s still unclear where AI will go from here, some retailers are already pushing the envelope. Fractal Analytics Chief Practice Officer of Retail Sangeetha Chandru says forward-thinking retailers have already begun letting customers search or find products based on images or photos, and analyzing customer data to make predictions about future trends.
While Chandru shares Stevenson’s concerns over the cost of implementation and maintaining AI technology, she says there are ways around the issue. For example, retailers can choose cloud-based solutions, which tend to be more affordable than building and maintaining on-premise AI systems, or they can partner with third-party vendors who specialize in AI technology.
“AI technology is already revolutionizing the ways customers shop, and we’re quickly approaching a new reality where most of the successful retailers utilize it. This is likely because the business model for retailers essentially comes down to analyzing a consumer’s wants and demands and delivering them – both in terms of the end product or service and the overall customer experience,” Stevenson says. “AI can learn from customers and provide retailers with the opportunity to market and provide exactly what a customer is looking for. It can also help retailers provide multiple, unique and personalized shopping experiences that cater to all different types of customers.”
