Remember when the buzz was all about category management? E-commerce? Block chain? Big data?
Well, the new chatter is all about artificial intelligence, or AI. But this time the breakthrough tech is traveling through everything – business, consumers, governments and even artists. Unlike those other transformative technology waves, AI is something we can experience and marvel at in real time.
What is it?
It started with Alan Turing’s 1950 paper, titled “Computing Machinery and Intelligence,” that discussed how to build intelligent machines and test that intelligence. It has since resulted in the technology industry continuing to work on making computers intuitive – able to listen, form connections and seek out problems that happen in real time, in the same way humans do.
All of this because, as powerful as modern computers are, they are mostly stupid. They are great at performing rote tasks, but horrible at doing something they weren’t specifically trained to do.
We know this in our daily lives. One missed key in item setup, and our scanners can’t read the UPC on a product. One upgrade to a piece of software and other programs won’t work. Or heaven forbid, we get stuck talking to a robot customer service representative who can respond only to certain prompts because that’s all it was asked to do.
As great as modern computers are at counting, tracking and processing, they are terrible when it comes to connecting random inputs together and forming new connections that turn into insights.
Sure, we get a bunch of reports every day, but does the system tell us what to do what that data?
The promise of AI is the ability to interact with a computer that can process massive amounts of data distributed over multiple networks and systems and figure out the next most logical answer.
There are a lot of AI systems in play, with more on the way. At the core of their programing are three major trends that had to happen before they could begin to work.
- Data – Just like a human brain, an AI engine needs access to a lot of data to operate. The worldwide web stores that data and makes it accessible – literally billions of records are uploaded, archived and readily available to anyone with web access.
- Portable internet – The internet had to be portable and accessible quickly, and cloud computing moved the world’s information library into a readily accessible, liquid universe.
- Super-fast processing power – With the ongoing reduction in cost and rapid increase in the power of computer chips and processors, AI is now available to almost anyone.
Benefits to grocers
So, what does it mean for us in retail grocery?
For operations, AI has so many benefits. In the future, we could ask an AI engine to handle scheduling, matching associate needs and work demand schedules to keep the retail floor manned but still let workers balance work and home.
Instead of badgering the operations manager in stores, associates could interact with an AI engine in real time.
AI-powered scanners could look at items in real time the way a human does. This means figuring out the difference between a plantain and banana and pricing them accurately in lane through a camera interface, without special stickers, tags or specialized cashier training.
AI could monitor shrink in real time too, looking at rate of sales in perishable products and recommending discounts before products turn to waste.
One of AI’s big advances is its ability to make recommendations in real time to allow human interaction to address a problem before it becomes critical.
For managers, it would shift the way they interact with reports and systems. In the future, AI-powered management tools would allow leaders to ask, “What should I do to increase margins in produce?” rather than having to sift through a mountain of data to find an answer.
A natural language interface to product and sales data would be a game-changer for managers. Instead of relying (and waiting for) data analysts to ferret out clues from the hordes of retail data we generate, AI engines can respond to queries directly.
- “Why is shrink growing in deli?”
- “What are three ideas to improve response to my advertising?”
- “Where can I raise prices without alienating customers, and where should I reduce prices to increase draw rate of new customers?”
We’ve heard these promises before. Every commercial analytics platform promises that their software will make our team smarter.
The difference here is that operators and merchants can interact with the data directly, intuitively, and get real time suggestions – not just reports and graphs – without having to be data scientists themselves.
Perhaps one of the most exciting opportunities will be the direct interaction between end customers and data. That’s not something most people talk about, but it will be big, exciting and fun.
AI will let customers ask questions and receive real-time answers:
- “Which items should I buy to replace gluten in my favorite recipe?”
- “Can you generate a shopping list for me based on what I have bought before so I don’t forget things I might need?”
- “Please automatically download coupons and rewards to make sure I never miss out on a deal on brands I like.”
AI will also revolutionize customer service, allowing shoppers to tell systems what they want instead of using sequential prompts on the phone (press 2 for sales, press 3 for repairs).
It will continue to learn from previous interactions. So if many customers are asking the same question, it can optimize its answers based on their responses. And it can remember previous interactions, so the shopper doesn’t have to start from scratch every time.
When can we start to use it?
AI is here now. Many software providers are harnessing the power of AI or experimenting with AI upgrades. But as with all things technology, the transition from iterative thinking to intuitive will take time and copious amounts of data.
Early AI-powered tools will focus on inventory and pricing optimization, labor scheduling and marketing effectiveness since those are systems that already capture and store a lot of data. Expect nominal improvements now and explosive ones in the next decade as AI goes from bolt-on to center-stage of the next generation of software.
What are risks?
Or “Should I stay away from anyone named Sarah Conners?”
As with all things new, there are always concerns. AI is disrupting industries. Educators are seeing AI-written term papers by students at every grade level. Intellectual property attorneys are dealing with AI-inspired copyright infringement in literature, design and art. Doctors are making diagnoses using AI-powered recommendations. And AI is writing computer program code, sometimes in ways developers hadn’t foreseen.
Look for fraud and ransomware to be early users of AI – all those poorly written emails about incarcerated princes wanting to send us millions of dollars will start to seem way smarter as email phishing becomes more sophisticated. Be careful as AI will help thieves increasingly trick us into opening and downloading viruses.
With technology, the good usually outweighs the bad. Rather than being fearful we need to be engaged now so we can begin to understand the promise and imagine how it could help us be smarter operators, merchants, manufacturers and retailers.