5 innovative practice directions and predictions for the integration of "AI (artificial intelligence) + digital retail".

The penetration and integration of AI technology is bringing innovation to many scenarios, among which the digital retail field has also opened a new development path with the blessing of AI. In this article, the author looks forward to the future development of "AI technology + digital retail", so let's take a look.

In the torrent of AI (artificial intelligence) sweeping the world, digital retail has also opened a new stage of development. In the face of the extensive penetration and scenario innovation of various large models, AIGC and AI agents, I look forward to the future development of "AI technology + digital retail" from five key perspectives. At the same time, industry professionals are also welcome to exchange ideas on this topic.

First: smart chain, the global intelligent transformation of the retail industry

First of all, from a global perspective, the retail industry will launch an intelligent revolution from the inside out and throughout the whole process. AI technology can closely connect all nodes such as procurement, warehousing, logistics, operations, sales and service. In particular, the trained industry AI agent can make the supply chain system more flexible and efficient than ever through in-depth insight into market fluctuations, accurate prediction of consumer demand, intelligent inventory scheduling, and automated warehouse operations.

Based on deep learning's commodity classification, price prediction and membership operation model, etc., with its deep insight and analysis of massive data, it can provide accurate decision-making for the dynamic adjustment of price strategies, the prediction of commodity sales, the scientific allocation of inventory levels, and the "thousands of faces" of membership operations. All of this will help retail companies become more comfortable in a rapidly changing market.

For example, JD.com has achieved intelligent and automated replenishment through big data technology and machine learning to design prediction models and replenishment models, with an accuracy rate of more than 80%.

Amazon acquires Kiva Systems and changes its name to Amazon Robotics. As of 2023, Amazon has deployed more than 750,000 robots in its supply chain to further improve the efficiency of warehouse operations and increase the speed of order delivery by 25%. South Korean e-commerce giant Coupang has also invested more than 260 million US dollars to build a 12-story intelligent logistics center, deployed P series picking robots and S series sorting robots, and successfully upgraded the intelligent supply chain.

However, this is only a foreseeable trend in retail development, and if companies want to be able to compete with their opponents in the future, they must gradually build a smart supply chain system supported by AI technology, and at the same time recruit interdisciplinary AI and digital talents, and cultivate an elite team that can not only control cutting-edge technology but also understand business logic.

Second, the integration of virtual and real, AI enhances the immersive shopping experience

It is not difficult to imagine that with the explosion of AI applications, AI magic wands will create more surprising and dreamy "native AI shopping paradises", and digital retail will enter a new era of virtual and real interweaving and sensory immersion.

For example, AIGC will generate highly realistic virtual product displays and interactive environments, allowing consumers to try on clothing and accessories, design and preview home furnishings, simulate the state of a product in different scenarios, and so on.

In the future, with the help of some new technology devices and applications, more and more consumers will be able to participate in online virtual experience activities held by brands, and experience more creative interaction in addition to voice and visual.

The AI agent incarnates as an intimate personal shopping consultant, who is on hand to provide one-on-one professional consultation and customized advice according to consumers' immediate needs and emotional fluctuations, so that the shopping journey can be sublimated into a personalized surprise exploration.

For example, a foreign multi-modal "AI glasses" can interact with the wearer in real time. When a user looks at a pot of flowers and casually asks, "What kind of flower is this?", the AI glasses can immediately automatically take a photo of the uploaded flower for search, and generate a voice interpretation to communicate with the user in real time. If the user wants to buy this flower, the AI glasses can also immediately recommend the product purchase link. The whole process is naturally interactive, not even any extra clicks.

It is conceivable that in the future, anyone wearing these glasses, walking on the street and seeing other people's beautiful bags and clothing and accessories they are wearing, can get a link to the product through a simple conversation with the AI glasses, and the AI version of "what you see is what you get" may become a huge e-commerce traffic entrance.

In short, in the new era of AI, enterprises should deeply embrace technological innovation, invest resources in developing and upgrading shopping platforms, and skillfully integrate AIGC and AI agents to create an immersive consumption scene that is unbounded, interactive, and emotionally resonant.

Third: AI technology and data-driven personalized services

In the past, personalization was a difficult and time-consuming task, but now AI makes personalization easy and efficient. AI technology can deeply integrate consumer behavior data, social network information, geographic location and other multi-source data to generate highly personalized product recommendations, marketing content, and shopping scenarios. At the same time, consumers can also take the initiative to put forward demands, such as voice intelligent search for goods, let AI provide intelligent price comparison, let AI provide decision-making suggestions, etc.

In the future, the AI agent customer service/digital assistant of enterprises will be able to provide customized product recommendations and shopping journeys according to the real-time situation and emotional state of each consumer.

For example, personal stylists and clothing styling consultants are relatively expensive services that the average consumer cannot afford. Thread, a British men's fashion e-commerce platform, seized the opportunity as a pioneer in personalized recommendations, using AI technology to recommend the most suitable outfit options for users. Users only need to upload a few personal photos and fill out a questionnaire, and Thread will use AI algorithms to select the best match to recommend to customers, and each customer can get personalized recommendations.

Additionally, according to Twilio Segment, 85% of businesses say they're delivering personalized experiences, but less than 60% of customers say they've received them. That said, the "speed of delivery" of a personalized experience is just as important as delivering the personalized experience itself. THIS IS WHERE AI TECHNOLOGY CAN PLAY AN ADVANTAGE, AND THAT IS THE PERSONALIZED SERVICE OF "AI FOR ALL USERS", WHICH CAN BE ONLINE 24 HOURS A DAY.

Fourth: co-creation and symbiosis, open innovation and ecological co-construction

It is foreseeable that in the future, digital retail will be a fertile ground for innovation full of vitality and full of "AI", with a more open innovation ecosystem. Brand retailers, AI technology companies, third-party developers, KOLs, and consumers will participate in supply chain construction, product design, content creation, channel cooperation, and value co-creation. AIGC will also empower consumers to participate in product design, marketing interaction and social sharing more conveniently. As the underlying coordinator, the AI agent can connect and integrate the resources of all parties to achieve agile innovation through automation and intelligence.

In the future AI ecosystem, general-purpose large models can be responsible for solving long-tail problems, while high-value business scenarios will be solved by professional and customized AI applications.

For example, through cooperation with AI technology companies, Wansli Silk established the "Wansli AIGC Laboratory" and launched the first large model of the garment and silk industry in China, promoting the innovation and transformation of the traditional silk industry with AIGC technology. This initiative has also attracted more and more young consumers to design creative silk scarf products with the help of their own creativity and ideas with the help of the AIGC application of Wansli, and place orders for production. The author also experienced on-site customization at the Wanshili Science and Technology Innovation Center in Hangzhou, and the personalized custom silk scarf designs displayed in the exhibition hall were also eye-catching.

In 2023, Wansli and AI technology companies jointly launched the AIGC Creation Contest with the theme of the Asian Games, which became a hot topic at that time. At the site of the Asian Games, with the help of the waterless printing all-in-one machine developed by Wansli, it only takes 2 hours to customize a silk scarf from design to production and finally get the actual product. It can be seen that the flexible and intelligent production chain combined with "AI technology + intelligent hardware" has completely subverted the design and production system of traditional silk enterprises and promoted the transformation and upgrading of the entire industry.

Fifth: the digital integration of sustainability and social responsibility

In addition to responding to the low-carbon environmental protection policies advocated by the state, enterprises must also pay attention to the consumption tendency of Gen Z users who are active in the digital world. In a consumer survey, 80% of Gen Z consumers said they were more willing to buy green products, and they were very concerned about the specific plans and achievements implemented by companies in green environmental protection.

Therefore, more and more enterprises are deeply integrating AI technology into the "sustainable development goals" and carrying out "green digital retail", and AI technology makes the "sustainable development goals" set by enterprises easier to achieve.

For example, AI agents can help monitor the carbon footprint of the supply chain, optimize resource allocation, reduce resource waste, and reduce carbon emissions. In addition, companies can use AIGC technology to generate environmental public service announcements and educational content to guide consumers to make eco-friendly choices, such as buying small portions of food (to avoid waste), choosing eco-friendly packaging, and participating in corporate waste recycling programs. Companies can also digitally demonstrate their environmental initiatives and achievements in a transparent manner to enhance their brand image.

In addition to retail, AI technology is playing an increasingly important role in the automotive industry chain under the wave of electrification and intelligence. As the world's largest auto parts supplier, Bosch China has been embracing AI technology for a long time in industrial manufacturing and intelligent driving technology.

In recent years, Bosch China has made full use of its technological management advantages to introduce AI technology into the carbon neutrality module through the "Bosch Chinese Center for Artificial Intelligence". At the same time, Bosch has also developed an online energy management platform, and the current data-driven system realizes 24-hour dynamic control of the whole plant and saves energy by more than 10%. Using artificial intelligence technology, Bosch Changsha, China, can optimize the management of the plant's production energy based on factors such as the current weather, temperature, historical production line status, and production plan, and this energy management system has reduced power consumption by 18% and production carbon emissions by 14%.

Start your AI engine and break the waves together

In summary, brands should actively invest in new AI technology applications, improve data decision-making and management capabilities, innovate supply chain systems, and optimize retail links. At the same time, we should establish an open and cooperative ecosystem to jointly innovate business models and comprehensively improve user experience. While using AI technology, it is also necessary to focus on strengthening consumer privacy protection and business data security, and integrate "sustainability goals" into the overall digital strategy of the enterprise.

Author: Xu Lizhao

This article was originally published by @徐礼昭商业评论 on Everyone is a Product Manager. Reproduction without permission is prohibited

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