Steve Jobs, the celebrated co-founder of Apple, once claimed, “People don’t know what they want until you show it to them. It’s our responsibility to predict what they want even before they do.”
This is precisely the philosophy that the retail industry is now adopting through the integration of state-of-the-art Generative AI technology.
Unlike conventional AI, which identifies patterns and makes informed decisions, Generative AI utilizes neural networks, trained with colossal volumes of data, to generate new and unique content from minimal user input.
This technology is rapidly being adopted by businesses across the spectrum.
Walmart is researching Generative AI for advanced customer chatbots, Levi Strauss aims to diversify its range of models by incorporating computer-generated alternatives, and Shopify assists merchants in creating product descriptions through targeted keywords and desired tone selection.
Innovative startups like Fashable and Verneek are finding unique applications for Generative AI in retail.
Embracing Generative AI can revolutionize multiple aspects of a business, from operations to customer relationships. There's a wealth of potential revenue at stake, with global ecommerce sales predicted to rise to $5.4 trillion by 2026, from $3.3 trillion today, as per Morgan Stanley.
Yet, before one can harness the efficiency of Generative AI, it's crucial to lay a solid AI groundwork.
Large Language Models (LLMs), the AI models underpinning Generative AI, work by learning from extensive multi-source data to generate new content. The latest generative AI models can be trained and fine-tuned using proprietary data from retailers, embodying their specific brand voice and style.
A retailer seeking to use Generative AI for creating ecommerce product catalog descriptions, for example, would train the model on relevant product data and metatags exclusive to its brand.
There are four key areas where Generative AI can deliver quick and significant benefits for retailers:
Hyper-Personalized Shopping Experience:
Generative AI can significantly enhance customer experiences and boost revenue by tailoring product recommendations based on present customer needs, as opposed to past purchases.
The technology can analyze customer data, perform sentiment analysis on social media, and tailor the shopping journey to offer bespoke product suggestions and discounts to maximize sales.
An excellent example of this is Quin Shopping AI, an application by New York startup Verneek, which aids customers in making well-informed decisions during their online shopping journeys.
Streamlined Product Catalog and Descriptions:
Generative AI can simplify the process of integrating new products into ecommerce catalogs. Trained on extensive product data, these AI models can automatically create rich, SEO-friendly product descriptions, complete with high-resolution images.
As a result, productivity is increased, and sales are improved. Additionally, the AI models can generate innovative product designs based on customer feedback, sales data, and market trends, as demonstrated by Portugal-based startup Fashable.
Generative AI can dynamically adjust pricing based on market conditions or customer behavior, helping retailers maximize profits. By tracking competitor prices, analyzing demand patterns, market trends, and operational costs, Generative AI can offer real-time pricing recommendations, resulting in improved profit margins.
Enhanced Customer Service:
Generative AI can significantly improve customer service. Virtual customer assistants, trained on the retailer’s data, can generate responses and translate content in multiple languages. The technology can auto-generate customer service chats or emails, check resource planning systems when drafting these responses, and focus human agents on more complex customer issues or customer retention offers.
In conclusion, Generative AI is proving to be a game-changer for the retailers who are leveraging it, resulting in increased revenue, enhanced customer loyalty, and higher margins. Given the substantial benefits, no retailer can afford to ignore this wave of productivity-enhancing technology.
Q: What is Generative AI?
A: Generative AI is a form of artificial intelligence that uses neural networks trained with extensive volumes of data to create new, original content based on minimal user input.
Q: How can Generative AI improve customer service in retail?
A: Generative AI can enhance customer service by creating virtual customer assistants that can generate responses and translate content in multiple languages. It can also auto-generate customer service chats or emails, freeing up human agents to deal with more complex customer issues.
Q: How does Generative AI facilitate hyper-personalized shopping experiences?
A: Generative AI can analyze customer data and perform sentiment analysis on social media to tailor the shopping journey to offer bespoke product suggestions and discounts, thereby improving the shopping experience and boosting sales.
Q: Can Generative AI assist in product description and catalog creation?
A: Yes, Generative AI can streamline the process of integrating new products into ecommerce catalogs by auto-generating rich, SEO-friendly product descriptions. It can also generate innovative product designs based on customer feedback, sales data, and market trends.
Q: How does Generative AI contribute to automatic price optimization?
A: Generative AI can dynamically adjust pricing based on market conditions or customer behavior. It can track competitor prices, analyze demand patterns and market trends, and offer real-time pricing recommendations, thus maximizing profits.