This blog has been written by a human.
I’m telling you this because, if you were at NRF ‘24, Retail’s Big Show in New York recently, you might be forgiven for thinking that AI had taken over everything. Sure, there were many other topics being discussed, and we’ll come back to some of these shortly. But first - what’s with the AI?
Depending who you choose to listen to, AI is either just hype, useful, a buzzword, the future, evil, a solution in search of a problem, changing society, gimmickry, exciting, frightening, evolutionary, revolutionary – the list goes on. The truth is, to some extent, it is probably all of the above. And so delegates at the show were looking to some of the most noted industry leaders to help explain exactly what AI means for Retail, its practical application, and why we should care.
A hype cycle that has been going on for decades
Perhaps a good place to start is to understand that AI is nothing new, and we have been using it for a long time – as the legendary Salesforce Chair and CEO, Marc Benioff said: “AI is a hype cycle that has been going on for decades”.
Conversational AI (chatbots) and Natural Language Processing (“Alexa!” and “OK Google”) are nothing new; Image processing has come of age (solutions like the Mashgin kiosk is now deployed in over 3,500 locations and now expanding beyond the US); Hundreds if not thousands of “AI powered” tools to help retailers optimise stock, logistics, fraud detection, customer recommendation engines, and so forth; and going back much further - and beyond retail - there are those of us who fondly recall our days at university, looking at the algorithms behind “Eliza”, the Turing Test, or knocking up some Prolog code (all essential reading for geeks and insomniacs).
AI is not new.
So why such a big deal now?
The answer is Generative AI (Gen AI), and the rise of hugely popular and accessible services like ChatGPT, DALL-E, and Copilot. There is little doubt that these tools are great for enhancing productivity in the way we work, create, and interact with others. Perhaps it’s less obvious what Retail challenges Gen AI solves, but here again the NRF ‘24 keynote speakers and featured sessions provided insight and answers. An example (also recently highlighted at CES) is Walmart’s Gen AI fuelled recommendation and search engine, that can take abstract customer queries such as “I want to have a Superbowl party” and automatically generate a complete list of what you need to be the perfect host – covering everything from drinks and snacks, paper plates and decorations, and even whether a new TV might be in order. As many speakers observed, these new AI tools are helping customers find things that they didn’t realise they need.
It seems evident that while we may be at peak-hype with AI, it is already deeply established in Retail and the wider world – and will continue to be so. Far from being a force to be feared, AI will continue to evolve rapidly, becoming an intrinsic part of our day-to-day lives in the same way as the smartphone or the personal computer before that. As Microsoft puts it, “AI is the UI for the world’s knowledge”.
When it comes to AI in Retail, irrespective of the specific type being implemented, the practical applications distil down in to two fundamental areas: saving costs and improving customer experience.
And this matters because Retail is facing some powerful headwinds.
“Permacrisis”
At the macroeconomic level, the Pandemic is largely behind us. We are now seeing what the post-pandemic world looks like, as people finish re-evaluating their lives, settling on new habits and behaviours. There are still ripples in economic and other indicators, but the lurching peaks and troughs have largely smoothed out. While at last year’s show, delegates were reaching for the dictionary to figure out what “polycrisis” meant, this year they were figuring out if a “permacrisis” - driven by a number of factors including inflation, interest rates, global instability, and rising retail crime - is better or worse (hint: “perma” beats “poly”).
Weighing further on these challenges, Forrester presented data about some of the latest consumer trends in grocery. No surprise that consumers are getting ever more cost conscious, driving fierce competition amongst online and physical retailers. While this was a theme echoed by many of the speakers, it is hardly new insight. But with the “polycrisis” giving way to the “permacrisis”, many of the consumer shopping behaviour changes are becoming more embedded and enduring, and retailers need to think ahead about how they will respond in the long term.
Lowering prices is one response, although a fairly one-dimensional race to the bottom. Improving the customer experience to boost loyalty is another response – often much more complex and involved – and many senior retail execs spoke passionately about how they plan to grow business through serving customers better, in the ways that they want to be served.
WD Partners put forward a compelling argument that the experience of “going shopping” has narrowed to the point that going to a store is a purely functional activity in the same way as shopping online: find an item, buy it, exit. Little wonder that 63% of Americans prefer shopping online - which may not be such good news for retailers because the levers of competitive differentiation are mostly limited to selection, availability, delivery, and - above all - price. The challenge retailers face is making consumers want to visit their stores, where real customer loyalty can be built through better engagement.
Putting the customer in charge
One of the most important parts of the customer journey is the checkout, whether online or in-store – or even a combination of both. Retailers need to let customers take charge of their own shopping experience, all based on the context of the shopping trip.
Cashier, self-checkout, or cashier-less store? The choice should always be the customers.
Cash, card or mobile? Never make it difficult for a customer to give you their money.
BOPIS, ROPIS, BORIS or DORIS? Let that magic happen (and, no doubt, at least one Google search…).
Without question, AI and other technologies can go a long way towards helping to create great customer experiences. Technologies such as Unified Commerce platforms like Flooid, which bring backend and frontend systems together, seamlessly connecting touchpoints and leveraging data across multiple channels to deliver truly joined up customer journeys. Or kiosks and flexible and modular self-checkout solutions such as those demonstrated by Glory at our booth in the Expo hall, which give retailers the ability to let customers decide how they will order and pay, no matter the size or format of the store.
People led, tech powered
These technologies enable the automation of some of the most fundamental and functional elements of the customer journey. But many aspects such as emotion, vibe, and culture remain inherently human. There is a reason why “your people are your greatest asset” is a cliché, but according to data presented by Deloitte finding good staff is not getting any easier. Retaining quality, trained employees with experience and able to embody values and culture is often more difficult still. Technology and automation are taking away many of the harder, repetitive, and less rewarding tasks from staff, making their jobs less stressful and creating better ambassadors for the brand. With more time to focus on serving customers, employees can become – in the words of one senior exec – “superhumans”.
In the final end, it is apparent that the more we can automate, the more human retail can become.
Want to find out more about how you can automate your customer experience? Take a look at Glory’s solutions for Retail, or why not contact us and let’s talk!