Based on my non-scientific observations of the industry over the past 30+ years, the average lifespan of an innovation fad is about five years. Big Data was big for about five years earlier this decade, as was RFID last decade and continuous replenishment systems the decade before. There are, however, some developments that are clear long-term trends, including e-commerce, mobile computing and, it’s becoming clearer every year, artificial intelligence (AI).
Again, based on my observations, more than half the booths at this year’s Groceryshop in Las Vegas contained some element of AI, either in their signage or handout materials. Several sessions were dedicated to the topic and Coresight Research released a survey on AI in retail that included these insights:
- Real personalization is challenging for retailers.
- Forty percent of retailers plan to invest in AI/machine learning solutions in the next 12 months.
- Retail is leading the spending and adoption of AI. Healthy venture capital funding for AI startups is paving the way for a robust future industry.
- Most retailers believe that AI will help solve the problem of waste.
- Cost and accuracy are the two main factors that cause retailers to limit the scope of AI deployment.
AI is now going to be used for just about everything — certainly, for optimizing critical functions like pricing and promotions, but also for supplier management, logistics (last mile) and even in-store activities like task management. Imagine using AI to help automate the restroom cleaning process.
As Farhan Siddiqi, the chief digital officer at Ahold Delhaize, said at the conference, “Human/computer interface, automation/robotization and artificial intelligence — put all three together, and that’s where the magic happens.”