Interview with Ray Wang, who spoke on AI, forecasting, customer experience and more at the 2018 Xcelerate Retail Forum in Boston, MA.
Tell us your perspective on artificial intelligence – what are you seeing?
A big area of AI is thinking about how are we going to do things for replenishment of inventory; where we can think about assortment; where we can think about preferences and understanding behaviors over time. For example: It’s Mother’s Day and we know you always order flowers and we’re ready for that, but also offer you a few other options for you to consider. This works particularly well when people are in subscription scenarios.
The second big role for AI is inventory optimization. What are the top allocations by store or by region? What’s the seasonality that’s behind that? Do we understand behaviors and know them well enough to start tracking a pattern? That can be applied to optimize supply chain routes.
There’s also pricing and pricing discounts; putting all that together. Demand-based pricing, from markdowns or promotions.
What do you think is the most compelling thing about AI for retailers and suppliers?
I really think the bottom line is customer behavior. Customers want retailers and brands to understand them and then use that knowledge to give them what they want. Maybe it starts with an alert around something I’m interested in. Next, maybe a recommendation. Then collecting the preferences and behaviors so, ultimately, you can predict what a customer wants.
For example: You’re checking into a hotel and you’d rather not see the clerk. You want everything on your mobile app. You want to select the room on your own, open the room with a mobile key, and even order room service from your device. This makes sense for a lot of scenarios. But at the same time, you may want the full experience of someone greeting you, carrying your bags, taking you to the room, and giving you a tour.
The ultimate play for AI is how it can enable mass personalization at scale. We automate friction unless that friction elevates the brand experience.
What other major trends are you seeing in your work?
I think businesses are realizing that they need to consider retail in a holistic sense. Everything from thinking about how categories are set up and assortments considered to how we look at promotions and buyer behavior and understanding what actually happens on the ground. Which is how we get planning and organization in the store to work. Business are revisiting their store layouts, immersive experiences, making sure that they can fulfill. They’re trying to enable systems so questions asked by staff can be answered quickly, and then actions can be taken right away based on those answers. They’re automating where they can. When we put this all together, then this is when we can think about AI enabling retail.
Please give a short summary of what you presented at Xcelerate 2018 in Boston.
I discussed how mass personalization can be delivered. How AI-driven smart services will power the ability to deliver on this mass personalization at scale. How to deliver frictionless experiences. I wanted attendees to leave the conference understanding that we’ve got to rethink what the customer experience looks like. How we order and deliver immersive experiences. This is beyond omni/multichannel. I’m talking about what happens in the background, without you thinking. The channels are there; they’re ubiquitous. It’s irrelevant in the sense that it’s not the specific channels, it’s the content! The actual goods, the experience that happens. It’s also looking beyond the sale. Because post sale is just as important as the actual sale. What happens after that experience? You may buy something once and never come back again. But I think, in most cases, what we want to be able to do is craft that into content; craft that into stories. Talk about how to tie that into that larger brand experience.
Please tell our readers something personal/interesting about yourself.
By December 2018, 50% of the world will be connected to the internet. The opportunities to transform society, technology, economies, environment, and politics are limitless. It’s also a huge opportunity to keep the internet a place for “good.” What we do about digital privacy and digital human rights is the cause I’ll be championing over the next year. Privacy is not dead. It’s an inalienable human right and choice.
Learn more about AI’s applications for retail demand forecasting in the EIQ Research report, Improving forecasting accuracy in an age of retail disruption: Are AI and machine learning the future?
Learn more about the Xcelerate Retail Forum.