AI: THE PROMISE OF A GREAT FUTURE FOR RETAILERS
“This study reinforces what we are hearing our clients say: The possibilities and early use cases of Artificial Intelligence in the retail business, though in need of streamlining, are full of promise. One retailer we are working with is transforming their contact center to include a ‘chatbot agent’ with an AI program determining which calls to route to the chatbot and which ones to the live agent. Another is figuring out how to leverage machine learning to crash the concept-to-production cycle times for seasonal merchandise well before the season. Yet another is looking to use a machine learning algorithm to determine how promotional campaigns will work and to predict the success of the next customer touchpoint. Natural language processing is also being used extensively to painlessly manage complex contracts and policies with
employees, franchisees and suppliers. The way forward is clear. We must find the means for humans and machines to cooperate, so human potential might be amplified and applied to purposes that reimagine the retail experience into something more relevant to our times and for customers who deserve the best experiences that come from these times of being digital.”
The retail sector is arguably in a massive state of flux and business transformation. The entire sector is attempting to cope with fast-changing customer shopping habits and the shift of emphasis from the high-street to the Web. This has seen giants of the retail sector announcing store closures that
reflect moving consumer demand while others have changed their supply chains to become more Web-centric. However, across the board the retail
sector has invested in and innovated with a variety of technologies including Artificial Intelligence (AI), robotics, logistics automation, data analytics and
self-service technologies in an effort to become more competitive, more customer-centric and more responsive to demand and opportunity.
As part of its study Amplifying Human Potential: Towards Purposeful Artificial Intelligence, Infosys commissioned independent research to investigatenthe approach and attitudes that senior decision- makers in large organizations have towards AI technology and how they see the future application
and development of AI in their industries. As part of the research, 10 industries were surveyed, including Retail, Fast Moving Consumer Goods (FMCG), Utilities, Financial Services, Healthcare, Pharmaceuticals and
Life Sciences, Manufacturing, Telecoms, Automotive and Aerospace, and the Public Sector.
What follows is a glimpse into the findings specific to the retail sector.
TURNING TO AI TO DELIVER COMPETITIVE ADVANTAGE
Retailers have been using AI systems as part of their operations for an average of two years, with 44 percent using AI technology for between one and three years, with a further 20 percent actively using AI for over five years. Overall, 87 percent of retailers surveyed have deployed some form of AI or automation technology as part of their operations and decision-making processes not just for data analytics, but to actually automate decision-making and guidance for human decision-makers. It illustrates just how important autonomy in systems and processes is to fast-paced transactional businesses.
Retailers by the very nature of their transactional business generate and use a great deal of data — individual sales, customer histories, weather information, fashion trend and news reports, financial data on the cost of produce, etc. All of this data, current and historical, can be put to use to deliver functional business insights and inform decision- making, reduce time to market for new products and services, and improve success rates for initiatives. For example, automating and informing decision-making
through AI can help a retailer determine what to order and when, what products to merchandise at the front of the store or on the first page of the site, cross- selling and up-selling opportunities to individual customers based on previous purchases and current basket contents, the list goes on. Moreover, this can be done far faster.
The process of planning, procurement, making, distributing, selling and garnering customer feedback can easily take more than 18 months in the retail sector. It’s a long lead time that limits response to fast- moving trends. AI can expedite the process, reducing the time from ideation to sale, reducing indecision and informing trading decisions through historical data and trend analysis.
Nearly two-thirds of retailers (62 percent) are investing in big data automation and 43 percent in predictive analytics for just this reason. A fifth (20 percent) are investing in more traditional automation tools like interactive voice response technologies. Yet it is notable that much larger proportions are investing in intelligent solutions such as expert systems (43
percent) and machine learning (42 percent) to foster technology platforms that can be highly adaptive to changing traffic, user habits and trading conditions.
ETHICS AND AI
It is inevitable that AI will eventually take away a number of routine, low-end jobs from the workforce. It will also change the way organizations interact with people internally and externally as well as how the needs of those people are addressed. For example, deployment of AI needs support from the employees who may have concerns about roles that were once perceived as ‘skilled’ being reclassified as ‘unskilled’ by the arrival of AI. They may also have reservations about the need to retrain and whether employers expect them to continuously learn or acquire multiple skills. There may even be concerns about employees’ access to training courses and employers investing
fairly and adequately in multi-skilling.
With some jobs potentially evolving into new roles where people will oversee, manage and augment AI and automation systems, employees may also be worried about being unfairly judged on their AI and automation skills and education rather than their career experience.
Customers and suppliers may be impacted by the loss of a person-to-person interaction. They may also be concerned about the gathering and use of
data that they may deem as infringing on what they seem as personal. In all cases, people will expect to be treated fairly, honestly and with respect whenever new technology is inserted into their working day or personal time.
Any technology that is bound to impact the human aspects of the business is going to be a difficult one to assimilate, albeit it is a necessary transformation for the future success of the business. Therefore, considering the ethics of AI is important for any retailer looking to invest in a solution that will materially change the way staff works or the way customers interact with the organization.
Only a third of the respondents believed their organizations have fully considered the ethical issues relating to AI technology use. This is in contrast to 26 percent that have only partially considered the issue of ethics in use of AI in retail. Meanwhile over a third (34 percent) believe their organizations have not weighed up the ethical implications of deploying AI at all. The deficit of ethical debate in the retail sector is second only to the public sector (26 percent) in terms of industries that have failed to consider the ethical impact of AI investment.
The adoption and use of AI represents an exciting leap forward for many in the retail sector. However, careful consideration must be given to the impact an AI deployment will have on a business to ensure that employees
and customers come along for the ride. The length of time that early solutions have been in use bears witness to that. AI is helping the retail sector to drive both the customer-facing aspects of their businesses as well as automate the increasingly mechanized and growing supply chain backend that enables Web-based sales and physical retail supply. Retail is also using data analytics to inform decisions and recommendations using AI algorithms and previously unrealized data asset value.
The retail sector shares the view that the long-term role of AI in the sector is inevitable. At the same time, the successful use of AI requires balance: greater automation but with equal emphasis on people engagement and skills
development.
