Is AI The Answer? NRF Left Us In No Doubt That U.S. Retailers Think So

Any doubts about whether the U.S. retail industry is throwing its financial, intellectual, and maybe even emotional, weight behind Artificial Intelligence (AI) should have been well and truly dispelled last week.

While the Metaverse was thrust upon the industry yet stirred little more than a grudging nod, retailers are all over the possibilities offered by AI.

The great and good of the retail sector came together at the Javits Center in New York for their annual conference and expo, called The Big Show and organized by retail body the National Retail Federation (NRF).

Over 40,000 braced the icy conditions and there was only one word on their collective lips: AI.

Few sessions failed to feature AI and the expo floor was awash with AI-based solutions for everything from cashless payment systems to in-store merchandizing and, of course, chat bots.

One of those at the vanguard also happens to be the world’s biggest retailer, Walmart
WMT
. The Arkansas-headquartered retail behemoth has pivoted hugely towards technology over the past several years, snapping up tech start-ups and investing hugely in both in-store and e-commerce technologies.

“We’ve spent 14 years investing in cutting-edge techologies and we want to bring the same tech [for AI] with an open eco-system,“ said Anshu Bhardwaj, SVP and Chief Operating Officer, Walmart Global Technology and Walmart Commerce Technologies.

“Why is 2023 the year of hype over AI? Well the tech is emerging in the hands of customers and also the speed of computing has captured the imagination,” she added

AI For Adaptive Retailers

Bhardwaj said that AI is allowing Walmart to become what she called an “adaptive retailer”, meaning that it is able to use the technology to help intercept customers “at the best point to get you what you want”, or in other words to focus help and service at the point and time that most benefits the customer.

That’s the theory at least and she used the example of someone coming to Walmart’s website searching for unicorn-themed merchandise.

“That’s actually a very cognitive challenge but can I shave some time off that search? Or can we enable the customer to find other things related to unicorns, helping them. We’ve also been experimenting, investing and scaling ‘Ask Sam’ [Walmart’s chat bot]. It has all the back-end information, including accurate inventory. There’s lots of nuance in this too, such as AI better understanding substitutions,” she said.

A few days earlier at technology show CES, Walmart had announced something similar around generative shopping, giving the example of searching ‘Plan Super Bowl party’ on the site or app and providing complementary ideas, rather than the customer having to search individually for drinks, snacks, paper plates and so on.

Walmart was far from the only company to extol the opportunities of AI. Generative AI could be as disruptive as the arrival of the internet or mobile phones Google Cloud Managing Director of Retail Amy Eschliman claimed, as she dubbed the possibilities “endless”.

“These massive transformations are nothing new to retail — the internet is a great example, it changed the way we shop; mobile phones, same thing. Now it’s generative AI, which has the capability of transforming everything from the customer experience to the associate experience. It’s about the ability to synthesise and analyse information that we did not have before,” she said.

Retailers Experiment With AI

Macy’s CFO
CFO
and COO Adrian Mitchell said that the retailer has made a “lot of progress” applying AI to pricing and was continuing to experiment with AI-powered personalization and inventory allocation.

“Number one, it can definitely make your business simpler. It can help you execute better and help you make better decisions. What we’ve also learned is you have to lean in because retail is a disruptive space. If you stand still, you’re falling behind,” he said.

And fellow department store operator Saks, the e-commerce arm of Saks Fifth Avenue, said that it is also using AI, currently for efficiency.

“From a customer point of view we want to personalize, create editorial and photography,“ said Saks CEO Marc Metrick. “But we have to be careful and mindful of putting it in front of the customer. We need to be very open, it’s not controlled if you do it in the wrong way.

“The technology provides lots of great things but we have to be careful we’re not doing too much, too soon. There’s so much we can do but right now if you call Saks you speak to a person on a call, not a bot. But maybe you will in three years.”