PROMOTIONAL RESEARCH
The current use of AI in retail is the tip of the iceberg, and we are only starting to see how the technology can serve and transform the sector. Microsoft’s Olaf Akkerman explores how AI is being applied across the industry and what could come next
AI, with its ability to transform how we work, how data is managed and accessed by organisations, and how customers interact with retail and Consumer Packaged Goods (CPG) brands - has become a crucial part of the most effective go-to-market and margin creation strategies.
However, we are seeing that the real value of AI is achieved by those organisations that approach it as a business transformation project, not another technology initiative.
Leadership must back transformation
For any business transformation project to work well – it needs the active support of business leaders. Senior managers have the power and mandate to motivate staff, allocate resources and make sure that new working methods driven by AI are implemented throughout the organisation.
AI, especially generative AI - may still feel new, but leading retail and CPG businesses are already using it - and building on their existing investments in cloud, analytics, and automation to drive new revenue and lower costs.
Yet these impressive early results are far from an overnight success. They were achieved through a business-led approach and willingness to experiment.
Early learnings
Another reason AI transformation projects should also be business led is because sound preparation requires early and ongoing collaboration.
“Just like data, AI is only useful if you do something with it”
Business leaders, as well as HR, Legal and IT teams, should all be engaged from the start to ensure projects begin with specific business needs in mind, and follow ethical, responsible AI principles.
Once these are in place, organisations will achieve quicker wins by enabling staff to experiment and learn through trial and error.
Spending too much time assessing ideas and potential use cases can end up meaning nothing gets done.
Just like data, AI is only useful if you do something with it – so in our view, the best approach is to get from ideation to experimentation and fail or succeed quickly, and proceed to production.
Even small accelerations of staff workflows and incremental improvements to the customer experience achieved in practice are often worth more than perfectly defining projects in theory alone.
Kate Ancketill, ceo of retail strategy consultancy, GDR Creative Intelligence, comments, “2024 is going to be an incredible year for AI because CPG and retail business leaders are already working fast to unlock its value and roll out conversational AI solutions.
”Consumers are already comfortable with using the technology, from AI coaches for more mindful eating and drinking to AI travel planners and shopping assistants - it’s just a question of how quickly brands can capitalise on it.”
These are exciting times for retail and CPG despite the pressures these sectors face.
We have never seen this degree of interest and uptake at boardroom level for a new technology so quickly, yet we are learning alongside our customers that dynamic leadership, careful stewardship and deep partnerships are all required for sustainable AI success.
If you’d like to learn more about how AI can unlock value for your organisation, download our two new whitepapers, Building a Foundation for AI Success: A Leader’s Guide, and AI Use Cases for Business Leaders: Realise Value with AI.
And you can also visit our new hub for AI: microsoft.com/ai.
Olaf Akkerman is general manager, retail and consumer goods industry at Microsoft
