EXCLUSIVE: How Amazon sees generative AI affecting retail
Generative AI has already had a substantial impact on retail, according to Amazon.
Chain Store Age recently spoke with Justin Honaman, head of worldwide retail & consumer packaged goods GTM, Amazon Web Services, about how generative AI is continuing to transform operations across the retail enterprise.
How is generative AI transforming retail operations internally?
You can apply across all lines of business including engineering, marketing, customer service, finance and sales. Customer experience is improving through capabilities such as chatbots, virtual assistants, intelligent contact centers, personalization and content moderation.
Employee productivity can be boosted with generative AI-powered conversational search, content creation, text summarization and code generation among others. The same technology can turbocharge production of all types of creative content from art and music to text, images, animations and video.
Finally, generative AI can improve business operations with intelligent document processing, maintenance assistants, quality control and visual inspection, and synthetic training data generation.
Many retailers are beyond the early adoption phase with generative AI and are already leveraging this technology. For example, for product content creation, oftentimes retailers receive incomplete product descriptions from vendors and must spend effort and time to create descriptions suitable for their website.
Given an image and a basic description, generative AI creates appropriate copy for the product. Generative AI can also perform translations in near-real-time. Product reviews are one of the most powerful selling tools for retailers.
With hundreds and thousands of reviews, it can be an expensive proposition to download all of them, send them to an agency for analysis, receive feedback weeks later and then act on it. That’s why retailers including Amazon are using generative AI for a customer review analysis to identify the common themes across reviews and summarize them in seconds.
And by collecting data from available sources, generative AI models are being used to enumerate risks in the supply chain like material shortages, shipping bottlenecks, transportation delays, quality problems, and unexpected demand changes.
[READ MORE: Supply chain executives focus on sustainability, AI]
A number of retailers are using coding models to code using natural language. Retailers can use generative AI models to decipher code and what it is doing, and it can find errors or things that could be improved and can change languages, which normally takes days.
How is generative AI enhancing the retail customer experience?
Generative AI will transform the vast majority of retail customer experiences, both online and in store. And the cloud unlocks generative AI capabilities by providing the flexibility to access and utilize needed AI models, and also dynamically store vast amounts of input data as well as insights from the data.
On-premise technologies are limited in their ability to scale and flex and thus, retailers and their ecosystem of partners have accelerated their journey to the cloud in order to take advantage of these new AI capabilities.
Consumers crave convenience, speed, and personalization whether they're browsing online or strolling through stores. With generative AI technology, consumers will be able to have a much more personalized shopping experience at their favorite retailers.
Generative AI is also a powerful tool for sales staff, enabling them to craft personalized interactions with each customer they serve. By analyzing every facet of a shopper's journey, from preferences to past purchases, this technology equips store staff with invaluable insights to elevate the shopping experience from mundane to memorable.
Retailers are also turning to AI to analyze customer behavior and predict preferences, enabling them to offer more relevant rewards and incentives. From a loyalty perspective, generative AI provides the ability to understand, engage with, act on, and serve up relevant offers and promotions increases dramatically.
What can retailers do to prepare for generative AI’s impact?
There are a number of capabilities an organization needs to establish in the data domain to develop an ongoing and comprehensive set of data, especially with unstructured data. These range from collecting and cleaning data through to making it useful, understandable and accessible to those that need it.
Also, retailers need to lean into "test and learn" thinking for AI. Retailers will need to experiment with different models to find the right tradeoff for your use cases. After identifying a use case, bring together the technical and business experts who understand these tradeoffs and are empowered to make a decision. They can iteratively test different size and types of models.
Another consideration for retailers is whether to use a centralized or decentralized AI approach. For example, retailers will likely want to centralize their AI strategy, security, governance processes and development of ethical guidelines and risk management protocols for consistency. The same with building and maintaining the core AI infrastructure and tools.
Decentralized skills and activities could include business domain knowledge, AI application development and data curation and preparation, all closer to the end customers.
It is important for retailers to confront the potential ramifications of incorporating generative AI into their operations, weighing the delicate balance between technological advancement and preserving consumer confidence.
Concerns persist among consumers regarding responsible usage, potential biases, data privacy, and the perceived reliability of AI compared to human interaction. In an industry where consumer trust reigns supreme, safeguarding brand reputation is non-negotiable.
What will be the biggest generative AI trend in retail in the next six months?
I expect retail will see a lot more generative AI integration into traditional technology platforms like Adobe, Salesforce and SAP. I also think we’re about to see an influx of new use cases in retail, specifically around efficiency, cost takeout and supply chain operations.
In supply chain operations, retailers will start to see models improve at making sense of multiple complex data sources and inputs. It's not a question of if AI will be an important part of business and operational strategy in retail, but when. Why wait to lean in?
