Generative AI is the biggest trend in retail right now. At least that was the key message at Retail’s Big Show, the National Retail Federation’s (NRF) annual conference, which is being held in New York City this week.
Running from January 14-16, the conference has attracted thousands of global retailers, suppliers, and media, all clamouring to see what’s new in the world of shopping and consumers.
And one topic seemed to be on the tip of everyone’s tongue: Generative artificial intelligence (AI).
What is Generative AI?
According to IBM Research, Generative AI “refers to deep-learning models that can generate high-quality text, images, and other content based on the data they were trained on.”
But what does that mean for the retail industry and how can it be applied to drive sales and enhance the customer experience?
According to multiple speakers on day one of the NRF conference, including Ekta Chopra, chief digital officer of ELF Beauty, Ludovic Maire, director of product management at Ssense, John Furner, chief executive officer of Walmart US, and Marc Benioff, chief executive officer of Salesforce, the future is Generative AI or bust.
Although some precautions must be set in place, the speakers warned. But first, let’s focus on the positive.
Benefits of incorporating Generative AI in retail
On a panel dubbed, “The great transition: Redefining retail and modern commerce,” Jeff Titterton, chief marketing officer of Stripe, Curtis Crawford, global director and general manager of fintech and loyalty at Wayfair, and Ssense’s Maire, discussed using technology to better collect data collection to improve the checkout experience.
They argued that AI would enable retailers to process various payment methods quickly and more efficiently to ensure a fast and optimised checkout experience for the customer.
As Maire explained, “If we have one or multiple checkout components that fail, like shipping, tax, or payment services, we’re still able to capture customer orders with a service level objective of 99.95 per cent.”
In a time when businesses are losing billions in potential sales due to e-commerce fraud, such tools would be useful in avoiding false payments and other scams.
Maire also pointed to Ssense’s 2023 launch of an AI-based personal styling chatbot. Where traditional stylists may have limited knowledge of an entire catalogue (as any human being would have trouble memorising hundreds of thousands of product listings), the retailer’s proprietary ChatGPT and AI-based chatbot can support human stylists in answering customers’ questions and provide them with additional styling recommendations.
While Generative AI may be new, the retail industry has been using AI technology for some time, as Rob Garf, vice president and general manager of retail at Salesforce, pointed out in a panel on “Retail’s AI revolution: How generative AI is transforming shopping,” with ELF Beauty’s Chopra and Rochelle Ezekiel, senior vice president, digital commerce for Canada Goose.
Seventeen per cent of all holiday orders in November and December 2023 were attributable to AI, he said. Generative AI represents the next step forward, and he believes it will be followed by autonomous AI and eventually artificial general intelligence.
At one point in the discussion, Chopra and Ezekiel discussed how AI can help blend information more seamlessly across international versions of a company’s website by providing more coherent translations.
Combining the human experience with AI
One of the ultimate benefits of AI in retail, as Benioff explained during a discussion with Walmart’s Furner, is the potential for customers to have their retail needs met through a comprehensive customer experience like no other.
The technology entrepreneur behind Salesforce pointed to his Loro Piana jacket, which he had purchased ahead of the conference. Since he had shopped with the brand at multiple locations over the past few months, Loro Piana’s retail staff were able to access data through Salesforce that not only revealed his past purchase information but also provided personalised product recommendations.
Another example of the opportunity to incorporate AI into retail that Benioff, a self-proclaimed Disney adult, cited was the experience of engaging with a Disney guide, or “personal concierge”.
Whereas a typical Disney guide would only be able to provide limited details on the lay of the land and help facilitate a smooth process to rides and other fun activities, one that was aided by the power of AI would be an unstoppable force.
By keeping track of the client’s whereabouts and their activities throughout their trip, and connecting with Disney employees across the park in real-time via platforms like Slack, a Disney guide supported by AI could improve the customer experience in several ways: suggesting schedule adjustments if a ride has a technical delay, or providing educated suggestions on what new experiences would best suit their interests.
However, Benioff noted that AI ethics must be taken into consideration moving forward to prevent businesses from taking advantage of customer data and to help ensure progress in areas, such as sustainability or diversity, equity, and inclusion initiatives.
“If it’s not improving us or the state of the world, we’re losing the plot with what AI can provide us,” Benioff warned.
Takeaways from day one of NRF
Day one of NRF was all about the opportunities around generative AI in retail. These were some of the key messages from the panels:
- The opportunities are endless: from using AI technology to seamlessly translate web and product copy on international sites, to being able to predict consumers’ needs before they’re even aware of them.
- AI plus a human touch will create an unstoppable customer service experience.
- Keeping up with the latest developments around AI integrations in retail is essential, and companies need to test, test, test as much as possible.
- Finding the proper talent to work with AI applications will be a key challenge due to the newness of the technology. As Chopra said, “Everyone is an AI expert and no one is.”