This week's National Retail Federation (NRF) 2024 conference is poised to showcase generative AI as a major highlight, with an array of cutting-edge tools for virtual assistants, retail operations, and analytics expected to be unveiled.
According to a recent Google Cloud survey, 81% of retail decision-makers express urgency in adopting generative AI, with 72% planning to implement this technology in 2024. The survey also highlights that 78% believe this technology will impact their industry this year, and a staggering 95% anticipate its impact on customer experience.
Himanshu Jain, General Manager and Vice President of Product at CommerceIQ, notes, "Retail is an incredible category for generative AI as it has some of the richest consumer data available, as well as a standard interface of 'search' that works incredibly well with the conversational nature of GPT-like interfaces."
Google has introduced five generative AI tools tailored for retailers:
AI-Powered Virtual Assistants: Customizable assistants integrated into websites and mobile apps, offering personalized assistance based on customer preferences such as color choices, budget constraints, accessory needs, and venue types.
Vertex AI Search: Allows retailers to tailor catalog searches and user search patterns, leading to more relevant search results and potentially increasing sales conversions.
Customer Service Solution: Integrates CRMs with generative AI to enable personalized product recommendations, appointment scheduling, and order status checks. It also provides tools for employees, such as summarizing customer interactions and generating responses.
Catalog Enrichment Tool: Uses generative AI to automate the creation of product descriptions and metadata tuned for search engine optimization (SEO).
Distributed Cloud Edge: A hardware and software solution for physical store locations, allowing access to AI applications with limited or no internet access.
Victoria's Secret is an early adopter of Google's retail generative AI solutions, utilizing virtual assistants and search capabilities and considering further applications in supply chain management and associate training.
Microsoft has also announced a comprehensive suite of generative AI applications for retailers, including:
Copilot Templates on Azure OpenAI Service: Allows retailers to build personalized systems for virtual assistants and store operations.
Store Operations Copilot: Assists employees with details and insights about trends, product catalogs, store procedures, and HR policies, along with voice-enabled task creation and assignments.
Integration with Fabric and Dynamics 365 Customer Insights: Retail capabilities integrated into Microsoft's analytics platform and customer insights.
While generative AI offers significant advancements, retailers face challenges, particularly with large-language models (LLMs) prone to hallucination. Hallucination occurs when AI generates false or misleading content. Mitigating this issue involves grounding LLMs in clean datasets, a challenging task for smaller retailers lacking expertise. Human evaluation of AI-generated content becomes crucial, with Google incorporating this process into its generative AI retail tools. As competition intensifies, retailers are navigating these challenges to unlock the full potential of generative AI in reshaping the retail landscape.
