eTail Boston 2024 – AI loses its novelty, gains acceptance

Artificial intelligence may not yet be plumbing, but speakers at the eTail Boston 2024 conference indicated it is beyond the shiny and new stage.

In a January column, I wrote that AI was not yet plumbing (something you assume is there and never think about unless it breaks), but was also not yet routine despite its universal presence across the enterprise. In a July update, I noted that AI is becoming a more routine retail tool.

Multiple presentations at the recent eTail Boston 2024 conference reinforced the message that AI (including generative AI) is maturing to the point that while retailers have not yet mastered its usage, its presence in the industry has become the norm rather than the exception. 

Let’s take a closer look at some of the AI learnings that came out of eTail Boston 2024:

Generative AI by the numbers – so far, so meh – but the future is bright

Michael Sinoway, CEO of Lucidworks, was succinct in the opening remarks of his session covering a major study analyzing generative AI trends in business.

"The hype is over," said Sinoway. "Generative AI has brought lackluster benefits to date. The biggest group of respondents said it has produced no benefit yet."

This sentiment is reflected in the difference between the percentage of respondents who planned to increase generative AI spending in 2023 (93%) and 2024 (63%). In addition, respondent concerns regarding generative AI issues such as data security (17% to 46%), decision transparency (9% to 35%), response accuracy (7% to 36%) and implementation cost 3% to 43%) all dramatically increased in that one-year period.

However, Sinoway still sees generative AI as a tool that will transform business. He cited the technology’s ability to move retailers from being able to track level one consumer signals (such as type of device, time of day and product SKU) to level two (physical location, cookie acceptance, offer response) and even level three (product margin) and advanced (referral history) signals.

In the next year, Sinoway predicted generative AI will continue to settle into the fabric of business as the cost of supporting large language models drops quickly and it becomes part of most commercial software. 

Know thy customer

Brendan Witcher, VP and principal analyst, digital business & strategy, Forrester Research, explained how AI can help retailers engaging with customers.

"You can treat customers as individuals at scale with computing power," said Witcher. According to Witcher, AI now allows retailers to conduct "digital dialogue" with customers in a way previously only possible through face-to-face interaction.

This partly rests on retailers utilizing tools that are already available to them, such as payment apps, which Witcher called “customer data capturing machines.” However, he also advised retailers to adopt leading-edge AI solutions to improve the customer experience and ease shopping.

"Customers are now digitally savvy in every area of life," said Witcher. "Computer vision and natural language processing are the future of retail. Listening, touching and seeing are natural things to do. Build voice- and visual-based solutions now."

Witcher also recommended retailers leverage advanced AI to perform inline commerce that reaches customers where they are, when they need something.

"Remove friction by being in the right place," he said. "If you’re a mouthwash brand, send a promotion to a person using a dating app to purchase your product at a nearby convenience store on the way to their date."

Help thy employee

Finally, attendees were reminded that AI is not just a means of conducting flashy, customer-facing activities like drone delivery. It is also a valuable tool for making employees more productive and responsive.

Sada Kshirsagar, VP of digital product management for Tractor Supply Company, explained how the nation’s largest rural lifestyle retailer uses AI to aid store associates. Digitally equipping store employees is especially important as 80% of the company’s e-commerce sales touch its stores.

[READ MORE: Tractor Supply Company deploys 5G networking]

"We leverage generative AI and LLMs for our associates," he said. "Our core value is service. If a customer asks for product information, a generative AI solution responds to the associate so they don’t have to remember everything, also enabling them to focus on higher-impact, more creative work."

Tractor Supply Company also uses an AI-based internal chat agent Kshirsagar called a "mastermind." The agent is integrated with Microsoft Teams so internal teams can query the bot during meetings.