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2023: The year generative AI broke in retail

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Generative AI impacted retail in a big way this year.

Generative artificial intelligence (AI) dominated the retail technology landscape in 2023.

Based on machine learning (ML), generative AI can create new content and ideas, including conversations, stories, images, videos, and music. The November 2022 public debut of the ChatGPT AI platform, which interacts with users in a conversational style that mimics human interaction and uses ML to continually refine and improve its responses, marked the arrival of leading-edge generative AI as a mainstream retail solution.

However, over the course of 2023, generative AI exploded in retail in a way similar to how alternative rock took over the popular music scene in 1991 (as explored in the documentary “1991: The Year Punk Broke”). Grab a plaid flannel shirt and take a look at how generative AI impacted retail this year in three key areas:

Customer engagement

Generative AI first came to prominence in retail as a sophisticated engine for supporting human-like chatbot interactions, and certainly many retail organizations deployed the technology in chatbot solutions.

One example is Instacart, which in March launched Ask Instacart, an AI-based chatbot that utilizes the ChatGPI API, as well as its own AI models and proprietary catalog data, to provide customers with product recommendations that are intuitively organized, as well as additional relevant information about food preparation, product attributes, and dietary considerations. 

But generative AI-based customer engagement tools released in 2023 range well beyond chatbots. Online consumer electronics retailer Newegg introduced generative AI customer solutions throughout the year, including a number of chatbots as well automated summaries of customer reviews and automated accuracy checks of product descriptions.

And in September, e-commerce platform eBay rolled out generative AI-based features that enable sellers to add in a title and category for a listing, with the rest of the listing automatically filled in; as well as to take or upload a photo in the eBay app and have generative AI fill in item information details, including titles and descriptions.

Proprietary technology development

Retailers have increasingly been building solutions in-house in recent years, but the advent of generative AI set off a wave of proprietary projects, Unsurprisingly, heavyweights Amazon and Walmart both participated in this trend. 

Amazon Web Services (AWS), the cloud services platform of Amazon, began making its new generative AI model called Bedrock widely available in April. In September, the e-tailer entered a strategic collaboration with San Francisco-based generative AI developer Anthropic that includes investing up to $4 billion in the company and taking a minority ownership position. 

Meanwhile, Walmart rolled out the Walmart GenAI Playground, an early-stage internal  tool where employees  can explore and learn about the new technology, in June 2023; and included a generative AI assistant in an employee app it launched in August 2023.

Walmart is also developing generative AI tools to assist customers with search and complex purchases, researching how the technology can aid consumer decision-making, and experimenting with a tool that would integrate the technology into its recently upgraded augmented reality (AR)-based View in Your Home feature and virtual try-on solutions.

But proprietary development efforts extend beyond the “usual suspects.” Domino’s and Microsoft are  in the early stages of developing a generative  assistant powered by Azure OpenAI Service that would help store managers perform daily tasks, and Batteries Plus has developed a group called the Center of Excellence to explore generative AI.

Employee augmentation

In the past 12 months, retailers have also sought to place generative AI in the hands of their employees. In August, direct-to-consumer intimate apparel retailer Adore Me revealed it was testing Duet AI for Google Workspace, which embeds generative AI across Google communication and collaboration apps including Gmail, Calendar, Drive, Docs and Meet, with employees. 

As a result, Adore Me hopes to reduce manual workload on its employees and provide corporate teams with more time to focus on creativity and innovation. 

August also saw early adopter Walmart include a generative AI-based feature called “My Assistant” in the new Me@Campus “super app” for corporate employees. Walmart said MyAssistant will aid tasks such as drafting, creative development and summarizing large documents.

Editor's Note: This is my last Retail Insights column of 2023. Thanks for reading my industry musings over the past year and I wish you a happy, healthy and safe holiday and New Year. Retail Insights will return Friday, Jan. 5 with a look at retail tech trends of 2024.

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