Artificial intelligence is proliferating and it’s here to stay. For retailers, they need to keep up with evolving technology to stay relevant and avoid collapsing. This includes embracing AI technology. So says one investment banker. He explains how.
“Consumers are changing quickly,” says Carl Marks Advisors managing director Howard Meitiner. “Their loyalty is much shorter. There’s a competitive reality; there’s a technology reality and then there’s a changing consumer behavior reality.”
A popular misperception is around how AI will cost jobs. Meitiner says it’s not that simple, and in some cases, the net result will be better for a company and its employees. For example, in the retail sector, there are a lot of tasks that can easily be automated such as pulling items off shelves. “If you eliminate those jobs and convert them to AI production, that’s a good thing,” Meitiner says.
“What it should provide, particularly in the service industry, is an opportunity to differentiate your service,” Meitiner says. “If we take a retail concept and they can eliminate 15 percent of their back-of-the-house jobs, they can put more focus on front-of-the-house service like 24-hour delivery and better engagement in the store. That’s where I think a victory is going to exist.”
One way AI is being used in some stores is with touch screen displays, where customers can learn about a company’s complete inventory of products without needing the physical space to showcase all of these items.
Crestview Partners-backed OneMagnify recently bought data analytics and AI company RXA. The target uses data and AI to help retailers reduce costs, improve service and increase sales. In one example, RXA solutions helped pharmacy chain Rite Aid identify $250,000 of lost revenue opportunities per store by online sentiment data among other intelligence to boost sales.
“If you’re not embracing AI, you’re going to be left behind because the service advantages to that are enormous,” Meitiner says. “I think that’s the next battle ground.”
Do you think AI is the future of retail? Let me know your thoughts at [email protected].