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AI in Retail (AiR) Spotlight Session Takeaways at Shoptalk 2024

Following a tremendously successful AiR Conference in New York City, RETHINK Retail continued the conversation at Shoptalk Las Vegas with AI in Retail (AiR) Spotlight Sessions. This presented an invaluable opportunity to demonstrate to the retail sector how Generative AI (GenAI) advancements present new opportunities and applications to fuel operational optimization, impacting areas like inventory precision, research & development, customer experience, contact centers, and more. 

AiR Spotlight Sessions at Shoptalk were led by Microsoft and partners who are pioneering the application of AI technology in the industry, further enriching the event. We also heard hot takes from RETHINK Retail Top Retail Experts. Let’s dive in. 

Contact Center Transformation Powered by OpenAI

Sessions kicked off with a conversation between Wipro and Microsoft to discuss how AI–specifically GenAI–is being used to transform contact center experiences. As a longstanding pain point for retailers and customers alike, contact centers are key components for retailers looking to improve. The challenge is in the complexity of the retail data ecosystem; GenAI comes in to handle the wide variety of data sets available, no matter how large or entwined.

“Before the advent of large language models, data algorithms, models could only really absorb structured data in a very programmatic way. But now with GenAI, we can also incorporate unstructured data into the mix, and that is the contact center data. So it’s going to be amazing, the richness that will be able to enable in the customer profiles as a result of that.” – Jayakumar (JK) Rajaretnam, Consulting Partner at Wipro Data & Analytics Advisory.

Now, with GenAI tools like Microsoft Azure OpenAI, retailers can leverage industry-specific data models and prebuilt AI/ML algorithms with the ability to incorporate new data and new personas that can be continuously enhanced and customized. These advances allow retailers to better address issues, summarize transcripts, and enable call center technology to understand and present natural language and conversational analytics.

Driving Personalized Customer Experiences – At Scale

“AI is actually going to be able to close a personalization gap between your in-store experiences and online experiences and do so at scale.” – Ava Ginsberg, Director of Product Marketing at Amperity 

Next, Amperity and Microsoft continued the conversation, discussing the role of GenAI in bridging the personalization gap between online and in-store experiences. 

Ava Ginsberg, Director of Product Marketing at Amperity, notes two ways to view AI capabilities: (1) outward-facing, what customers interact with, and (2) inward-facing, or, behind-the-scenes capabilities. Some examples of outward-facing capabilities include image and ad creation and content personalization at scale, quickly. 

GenAI also presents the opportunity for retailers to understand their customers more intimately and leverage their data to create special experiences. In business outcomes, this can be translated into enhanced product discovery, personalized online and in-store experiences, and more engagement opportunities. As with contact centers, natural language capabilities enhance the shopping experience.  

Retail’s competitive landscape is partially centered on product discovery, particularly the ability to swiftly identify products and optimize keywords. 

Emily Fannon, Managing Director at Accenture, delves further into the benefits of using GenAI as a tool to improve product discovery by understanding what your customers are looking for and how customers are interacting with brands and retailers:

“I think there’s a real opportunity where we’ll start to have assistance essentially in our shopping journey that will help us discover and find products and services that we’re looking for in a more natural way than we do today.” 

In other words, connecting consumer inspiration with products and services in a more intuitive, conversational way. 

Understanding the customer, identifying the loyal customer, what could be their buying behavior, all of those things, generative AI can do much better. -Srini Kasthoori, Senior Managing Partner of Retail & CPG at DXC. 

As GenAI evolves, so do its use cases, including optimizing supply chain and last-mile delivery operations as well as creating digital twins for store setups, streamlining the process without significant financial investment. With the maturity of this technology, Kasthoori argues that businesses will be able to enhance both employee experiences and customer satisfaction, ultimately improving overall operational efficiency and financial performance.

These transformations are poised to redefine the early stages of consumer exploration and discovery. Looking ahead, successful retailers must consider ways to hyper-personalize shopping experiences and optimize product discovery. Partnering with solution providers and consultants can help equip retailers with the right tools to do so. Microsoft, for instance, has built templates into their Cloud for Retail, including a copilot template for personalized shopping. 

AI-Accelerated Research and Development (R&D)

Research and Development is oftentimes a long, expensive process. Valentyna Iyevlyeva, Head of Data Science and AI for Consumer Goods and Retail at EPAM, breaks it down into three phases: front-end innovation, product development, and market launch. Each of these phases can be extremely complex, time-consuming, and expensive. 

Valentyna goes on to discuss the challenges and intricacies of these phases, but states that “with the rise of generative AI and wider adoption of more classic machine learning approaches, some of these problems will be less impactful as we go further.” As such, GenAI will help consumer goods and retailers reduce R&D expenses and timelines by streamlining processes, improving productivity, and accelerating innovation cycles.

Enabling Inventory Precision with AI

Inventory management is a longstanding hot topic in Retail. It’s marked by a growing focus on addressing challenges such as out-of-stock incidents, overstock situations, and shrinkage both internal and external. EY stresses the importance of identifying and focusing on the root causes. 

Isaac Krakovsky, Americas Retail Leader at EY, notes that “There are probably about 40 or so usual suspects as to where these problems reside. And we roll those up into three big buckets. There are supplier-related issues. Are my suppliers sending me my products on time? Are they sending them in full? There are demand forecasting issues. We leverage an AI tool set to really identify which are the most likely candidates for the problem and how to solve them to get to the root causes.”

Once the root causes are identified, GenAI tools can help improve these challenges for more precise physical inventory, with a spotlight on statistical sampling methods aimed at reducing the reliance on full-store inventories and boosting overall efficiency. 

Notes Isaac, some retailers today are not doing full-scale inventory audits, but auditing around 10% of the store’s inventory and then extrapolating shrink based on that 10%, saving tremendous time and resources. Anyone who has been on the frontline can appreciate this usage. 

Implementing GenAI in an Impactful Way

Top Retail Experts Vicki Cantrell (Chief Executive Officer, Vendors in Partnership, LLC) and Andrew Busby (Retail Consultant at Redline Retail) closed out the sessions by acknowledging the ROI and capabilities of GenAI, but tempered with the ongoing necessity of human intervention to refine AI outputs. They emphasized the importance of carefully evaluating how AI fits into business strategies and customer needs. 

Indeed, there’s so much you can do with GenAI that it can be overwhelming. Some key takeaways on how retailers can best transition to leveraging GenAI include: 

  • Make sure you have quality data 
  • Start small and test
  • Focus on applications that practically apply to your company
  • Remember, GenAI is not a human replacement 

Thank you to our contributors from Microsoft, Wipro, Amperity, Accenture, EPAM, DXC Technologies, EY, and our Top Retail Experts, Vicki Cantrell, and Andrew Busby. 

Click here to watch the full highlight video to see all of the AiR Spotlight Sessions!