2023 marked a turning point for artificial intelligence with the rapid rise of new generative Al technologies such as ChatGPT and incredible advances in image and video generation technology. It’s already beginning to change different areas of our everyday lives, but how will it impact retail? Cian Kelliher, Management Consulting Partner at KPMG Ireland explains.
Al is often equally exciting and frightening to people. While it does have the potential to threaten jobs through automation, it also has significant potential benefits for retail. Automation can reduce costs, monitor levels of carbon emissions and waste, and help to improve sustainability.
The technology is still at a relatively early stage and has yet to be fully commercialised. Many leaders find themselves trying to figure out how they will, if at all, incorporate this new tech into their businesses.
There is significant cost attached to this type of R&D but there could also be an opportunity cost for those who do not get a handle on this at an early stage.
Al is still largely unregulated and there are big questions about how this will change in the future, with the EU working on the Al Act. Before that though, we’ll have the Digital Services Act which will be directly applicable across the EU by February next year.
The act aims to regulate more strictly how social media advertising works. It aims to provide users with better information about why content is recommended to them. Targeted advertising will also be banned for minors and the use of sensitive data, such as sexual orientation and ethnicity will no longer be allowed.
They also aim to make products sold online within the EU safer as well in line with regulations. The Act is generally aimed at tech companies rather than at retailers, but it’s important for those who have a significant social media presence to understand how it may affect their marketing strategy.
Al has the potential to revolutionise everything from eliminating manual tasks through process automation, providing automated customer service, analysing consumer behaviour and preventing the loss of products through theft and expiry.
Technology investment is expensive upfront but can release pressure on the bottom line by increasing efficiencies and productivity from a shrinking workforce. New technologies in the hands of employees and direct automation, on the retail floor or within the supply chain, allow retailers to do more with less. Self-checkout and returns, automated distribution centres and many more efficiencies will become commonplace.
Just as importantly, automation and other innovations can free employees from manual tasks and allow them to focus on what matters most: enhancing the customer experience.
Retailers need to look at whether adopting Al is right for their business. This will first involve getting familiar with what this new tech can do. Some are undoubtedly already experimenting with this.
It’s too early to say whether this will fundamentally change how we shop, but it’s worth remembering that few in the 1990s predicted how much the internet and mobile phones would change our lives!
Source: KPMG Ireland