What’s the value of generative AI for retailers and suppliers?

Microsoft executive Jim Norred said in a presentation at Total Store Expo on Saturday that artificial intelligence is likely to be the biggest technological development to come along in our lifetime and has significant promise for retailers and suppliers.

Norred, general manager for retail, CPG and gaming at the tech giant, talked about the transformative impact of Generative AI on the retail industry and gave examples of how retailers in various sectors are already using the technology for personalized marketing, demand forecasting, supply chain optimization and much more. “I do believe it's really going to change the way we, as people, think, the way we reason and the way we learn,” he said.

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Norred said retailers are indeed in a unique situation since the pandemic, which transformed the landscape. They now have to contend with consumer pressure to create new shopping experiences, delivery expectations, better customer service expectations and disruptive supply chains. “All this has, to me, put retail in a situation where they've been forced to try to achieve more, and they've just been under such scrutiny. So it's really created a unique situation for retail.”

As a result, every company is trying to figure out how to adapt to changes in the market and how to use AI to potentially be disruptive, Norred said. The pandemic, he explained, forced retailers to invest in their digital foundations and “it puts them in a position so that they can run faster than so many other industries.”

Norred pointed to some of the companies that have been successful in their full-scale adoption of AI into their organizations, including Walmart, Facebook Meta and Apple, and offered advice on how other companies can approach integration.

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1. AI is not a silver bullet, so don't invest in it just for the sake of investing. “I would tell you look for the places to align it with your business strength. See how it can help.”

2. Think about how AI can enhance your business. “Where can I create greater transparency or reduce cycle times to make us operate more effectively? Think about reinventing customer experience” or how you can differentiate versus the competition or help you go faster.

3. Go slow. It’s a journey, but it can also be a catalyst for transformation. “I would tell you to think about this in small groups,” Norred advised. “Don't try to look at your entire organization and figure it out. In many cases, you've got data that silo in lots of different places. So think about where you can create value quickly. Embrace the technology, don't be afraid of it.”