Some phrases become so common that they bring thinking to a grinding halt.
A new one poses a special risk to retailers, because it may prevent them from seizing opportunities to keep up with competitors.
The phrase in question? “The AI revolution.”
To be clear, artificial intelligence (AI) is transforming retail. But retailers need to pay special attention to what AI transforms and why the changes matter.
AI can do even more for your business than you realize. Let’s focus on three crucial points related to generative AI, where the biggest advances are happening.
These points get lost in the talk of the “AI revolution.” You need to understand them so your business can maximize generative AI’s impact.
1) AI is only as good as your data — and you’re probably thinking about data too narrowly
Now, you might feel confident in your business’s data strategy. But you should still give it a hard look.
Why? Because for all the talk of Big Data, companies are actually becoming less data driven. A survey of Fortune 1000 business leaders shows that “data, analytics, and AI efforts have stalled — or even backslid.”
This means that the retail giants will keep getting bigger and better. The Harvard Business Review reports, “Walmart, Amazon, and a few other leading retailers operate at the leading edge of the analytics frontier.” Meanwhile, “most of their competitors still use very basic tools that are far better able at tracking where they’ve been than where they should be going.”
Add to this the fact that to be “data driven” means more today than it did only a few years ago.
Jonathan Chin, the cofounder and head of growth and strategy at Facteus, works with retailers around the world. “Many organizations do a good job using their customer data to inform decision making,” he says. “But additional external data products have become available. They provide much more, and much richer, information — information that AI can take to the next level.”
Chin explains, “Your own customer data is powerful, but that information provides only a keyhole view of consumer behavior.” The way to augment your internal analytics is to pull in consumer data from outside of your company.
“Real-time consumer transaction data shows you customers’ entire wallet of spend providing deeper context into your consumer’s behavior,” Chin says.
2) Generative AI can do much more than create content; you need it to unlock data
The generative AI conversation tends to focus on marketing, communications, and sales. To be sure, AI can help retailers create content, personalize communications, make smart product recommendations, and more.
But the critical overlooked function lies in making data more accessible to your organization.
Until now, businesses have needed specialized teams to manage and interpret vast bodies of data. Even running a basic report from a CRM can involve complicated queries. To conduct complex data analysis, you need to know programming languages like SQL and Python.
Generative AI changes that. It unlocks data for everyone in your business who needs it.
Chin says, “All you need to do is type in a question, and AI will give you your answer based on real-time data. AI makes even nontechnical workers data people.”
What kinds of questions can you ask when you marry up generative AI with consumer transaction data?
Any kind you want, at any level of granularity.
- What does Walmart spending by generation look like this year?
- What is the average spend per transaction for Chipotle versus Panera, broken down by region?
- How much do Millennials spend per transaction at Amazon versus Walmart? What is the month-by-month breakdown for the past year?
- How much do Starbucks customers in California spend at regional competitors Blue Bottle, Dutch Bros, and Philz?
In short, AI lets you use natural language to pull up real-time consumer spending data. And you can see practically any industry sector, any company, any customer segment, and any region, state, or even city.
3) You can keep up with industry leaders by combining generative AI and robust consumer data
Retail giants are gobbling up the market. The top 10% of retailers have seen their share of the industry’s profit jump from 60% to 70% in only a decade.
These businesses have poured massive resources into specialized data teams, even data subsidiaries. How can other retailers hope to keep up with these deep-pocketed leaders?
Generative AI creates a hack.
Chin explains, “Now the ‘little guys’ can compete. AI lets an entire organization harness data without throwing endless resources at the problem. Your company probably can’t afford to build out a huge data team to rival Amazon’s or Target’s. But with generative AI and new streams of data? You don’t need all that to make smart decisions.”
Chin has seen generative AI’s impact on his own business. “All our sales people have access to Facteus’s generative AI tool Mobius,” he says. “Now they can answer data questions without needing to pull in an engineer or some other specialist.”
Shaun Purewal, director of corporate sales at Facteus, says, “Using Mobius is like having a superpower. By transforming complex data queries into straightforward conversations, I can now provide on-demand, data-driven insights to our customers and prospects, helping them make better data-driven decisions.”
Purewal concludes, “It’s a game-changer.”
It can be for your business, too.View Original Article