Technology is uprooting every industry, including retail.
There is no better evidence of technology’s impact than the fact that seven of the ten most valuable companies in the world are technology-based. If we compare this to 2008 when there was only one technology company in the top ten, it becomes clear that value in business is shifting emphasis.
What’s more, these same technology companies today are investing heavily in AI. Alibaba alone plans to spend $15 billion dollars over the next three years. This is more than double our entire country’s R&D investment annually across everything, not just in AI. Damn.
Here in New Zealand we have to be realistic. Kiwi businesses can’t possibly compete with the investment these global tech giants are putting forward, but that shouldn’t rule us out of the game. In fact, it means we need to work harder to adapt in order to compete as we’re already seeing AI have a huge impact on the retail industry globally.
There is a silver lining to all this AI investment for retailers however, it has already yielded some advances that can be taken advantage of. There are some key areas where AI is already adding value for retailers both here in New Zealand and globally.
Computer vision is the technology equivalent to the part of the human brain that processes the information our eyes see and there have been big jumps recently in the accuracy and complexity of this field. Computer vision has applications for security, merchandising and customer service as it reads reactions of customers and identifies repeat or frustrated customers. This technology is also revolutionising the physical store concept, with Amazon Go utilising computer vision to provide a cashierless environment that allows customers to shop and leave without disruption.
AI has considerable benefits for retail in the accuracy and ease of management of stock and supply chains, as well as last-mile delivery via drones, robots and autonomous vehicles. Food delivery service DoorDash has been trialling self-driving delivery robots that are capable of carrying items in a 3-mile radius within 3 to 30 minutes. And as goods delivery is revolutionised, the way retailers plan their network of stores changes. Access to more sophisticated data enables retailers to test possible store catchment areas and cannibalisation of existing locations.
AI is enabling retailers to be smarter about their pricing and promotions by analysing not only the retailer’s data but also competitor prices, consumer behaviour and peak shopping periods. Granify uses AI to analyse the actions a customer takes such as scroll speed, products viewed, mouse movements and hesitations to identify when they are about to leave a site and convert this to a sale with a tailored promotional message.
The businesses who look to continuously innovate and challenge the status quo like this will be well-positioned to ride the wave of tech advancement. So how can you get started?
The key for retailers taking advantage of this recent wave of AI investment is to start small and start now. It doesn’t need huge investment to build an application from scratch, experimenting with solving a single customer problem is a good start. But the key is to start now before New Zealand gets left behind.