Stop me if you’ve heard this one before – there’s a disruptive technology that is going to change the way retailers do business. Big data, mobile, e-commerce all came with the same level of hype as the internet and while they’ve become essential parts of any business, they have yet to redefine the game in the same way.
Retailers have been fighting, adapting or dissolving since the birth of the internet and this next technology wave is expected to have a similar effect. However unlike mobile and e-commerce, the effects have the potential to be swift and quantifiable.
Gartner’s David’s Cearley recently outlined the Top 10 Strategic Technology Trends for 2017 with Artificial Intelligence (AI) & Advanced Machine Learning coming in at #1. This should not be taken lightly.
With limited resources and time, retail leaders are tasked with charting a strategic direction. They need to be diligent in scrutinizing where to invest dollars, time and energy to get there and most importantly, what any return will be when they do.
I’d be surprised if many retailer’s technology road maps included AI at this time last year. AI wasn’t on the Gartner list for 2015 and was only half way down for 2016. For a long time, it’s been something way out there on the horizon.
Well, no more. One only has to read The Economist, Wired, Time, or countless others to know that AI has arrived picking up on the unfulfilled promises of big data. AI is already being put into practice in the retail industry, gains are being seen, and we’ve had a window into the monolithic plans of some major retailers.
This presents a challenge for retailers: there is a need for speed to educate, adjust, adapt, and act like never before. Nimbleness hasn’t generally been an advantage when it came to technology; because it’s been the deep pocketed major players that are able to invest and test first while others, watch, learn, and play catch up (if necessary). Agility and speed to act is truly an advantage with AI as the promises of better, faster and cheaper can help to secure that coveted competitive edge and grab market share. AI is able to cleanse, organize, and optimize massive amounts of data for retailers to realize, not just meaningful, but perhaps previously unthinkable gains. Efficiencies realized in the 5%-10% range across forecasting, assortment planning, pricing, channel and product optimization will in the near term, not go towards the bottom line, but back into pricing, putting even more pressure on competitors who are not pursuing AI and hence not able to compete on price.
The moral of the story is, it’s moving fast. If you’re a retail marketing technology leader and you don’t have a strategic plan or direction that includes AI, you need to. AI is happening and if you take a wait-and-see approach, it may be too late to act by the time other retailers start applying it within their businesses. Doing nothing is not really an option. You are better off failing fast by trying (we think differently) or you just might begin to lead the transformation of your business, to better ensure its place in the 21st century marketplace.