Devangshu Dutta: One ring that rules them all

Here's how AI is likely to shape consumer experience in the years ahead

To be able to see the scope and all-pervasive impact of artificial intelligence (AI), we need to go beyond our expectations of humanoid robots. We also need to understand that AI works on a cycle of several mutually supportive elements that enable learning and adaptation. The terms “big data” and “analytics” have been bandied about, but have had limited impact so far in the retail business because it usually only touches the first two, at most three, of the elements. Big data models still depend on individuals in the business-taking decisions and acting based on what is recommended or suggested by the analytics outputs, and these tend to be weak links, which break the learning-adaptation chain. Of course, each of these elements can also have AI built in, for refinement over time. 

Certainly, retailers with a digital (web or mobile) presence are in a better position to use and benefit from AI, but that is no excuse for others to “roll over and die”. I’ll list a few aspects of the business already being impacted and others that are likely to be in the future.

Know the customer: The most obvious building block is the collection of customer data and teasing out patterns from it. This has been around so long that it is surprising what a small fraction of retailers has an effective customer database. While we live in a world that is increasingly drowning in information, most retailers continue to collect and look at very few data points, and are essentially institutionally “blind” about the customers they are serving. 

However, with digital transactions increasing, and compute and analytical capability steadily become less expensive and more flexible via the cloud, information streams from not only the retailers’ own transactions but also multiple sources can be tied together to achieve an ever better view of the customer’s behaviour. 

Prediction and response: Not only do we expect “intelligence” to identify, categorise and analyse information streaming in from the world better, but we also expect it to be able to anticipate what may happen and also to respond appropriately. 

Predictive analytics have been around in the retail world for more than a decade, but are still used by remarkably few retailers. At the most basic level, this can take the form of unidirectional reminders and prompts, which help to drive sales; remember the anecdote of Target (USA) sending maternity promotions based on analytics to a young woman whose family was unaware of her pregnancy? 

However, even automated service bots are becoming more common online; they can interact with customers, who have queries or problems, and will get more sophisticated with time. We are already having conversations with Siri, Google, Alexa and Cortana, why not with the retail store?

Visual and descriptive recognition: We can describe to another human being a shirt or dress that we want, or call for something to match an existing garment. Now imagine doing the same with a virtual sales assistant, which, powered by image recognition and deep learning, brings forward the appropriate suggestions. Wouldn’t that reduce shopping time and the frustration that goes with the fruitless trawling through hundreds of items?

Augmented and virtual reality: Retailers and brands are already taking tiny steps in this area, which I described in another piece a year ago (“Retail integrated”, http://bit.ly/2ibQwif, Third Eyesight) so I won’t repeat myself. Augmented reality, supported by AI, can help retail retain its power as an immersive and experiential activity, rather than becoming purely transaction-driven.

On the consumer side, AI can deliver a far higher degree of personalisation of the experience than has been feasible in the last few decades. While I’ve described different aspects, now see them as layers one built on the other, and imagine the shopping experience you might have as a consumer. If the scenario seems as if it might be from a sci-fi movie, just give it a few years. After all, moving staircases and remote viewing were also fantasy once.

On the business end, it potentially offers both flexibility and efficiency, rather than one at the cost of the other. But we’ll have to tackle that area in a separate piece.

The author is chief executive, Third Eyesight