AI in the age of COVID-19
Only a few industries – travel and petroleum – will be more affected by COVID-19 than retail, opines Andrew Pearson. Social distancing has entered the world’s lexicon, and it will be a part of the zeitgeist at least until a vaccine is found. Undoubtedly, it will be a while before we see bustling shopping malls, crowded restaurants, packed cafés and thumping clubs again.
It means retailers and e-tailers need to adjust to a reality that is going online. However, if people are not distanced from their mobile phones, tablets or computers, the retail industry will survive. Developments in artificial intelligence (AI), machine learning (ML), deep learning, and neuro-linguistic programming (NLP) might even help retail quickly thrive again. The current pandemic will, thus, hyperdrive many technologies that were already promising radical improvements.
Personalisation, data cooperation, supply chain AI, robotics, real-time and conversational AI, as well as sustainability, are all having their time in the COVID-19 spotlight. With AI and the coming “intelligence wave” – a software that learns how to see, hear, sense and interpret the world around us – will help power a new kind of retail experience.
Humanising CX with AI
According to PWC, “More than half of consumers (54%) say customer experience (CX) at most companies needs some work, while a third (32%) will walk away from a brand they love after just one bad experience.”[i]
People want to be recognised as a human being, not a number. Ironically, our expanded use of data crunched on machines in the cloud or on our mobile phones, coupled with AI, can help companies increase their CX by making them more human.
For example, British telecommunications company Sky UK uses AI to improve the efficiency of human relations through their call centre. When a customer connects with them, the system analyses a variety of customer attributes, including the products and services owned, their location and lifecycle stage and their customer service history. Based on this analysis, customers are connected with the best customer service representative to handle their issue. These representatives are then provided with conversation starters gleaned from customer profiles, enhancing familiarity and, probably, increasing loyalty.
Voice and conversational AI
According to Ubisend[ii], a producer of conversational software, 57% of consumers are interested in chatbots for their instantaneity, and 47% of customers would buy items from a chatbot, if offered. Companies like Domino’s Pizza, Quaker Oats, Emirates Vacation, Hipmunk, Kia, Whole Foods and Madison Reed have all created chatbots that raised creativity and interactivity to a new level.
While global pizza chain Domino’s Pizza’s chatbot can re-order previous orders, offer a full menu and track deliveries in real-time, American haircare brand Madison Reed’s chatbot goes a step further. It allows users to send a selfie to the app and then provides recommendation on the best colour products for that user’s unique hair colour.
Google Duplex has shown that AI chatbots can do things like make reservations at hair salons[iii], and this is one of deep learning’s future as well. Voice technology is waiting for mass use. Humans communicate through voice as much as any of the other senses. And the company that wins the battle with voice will win the battle
for the 21st century consumer. One of the most important statistics about voice is the fact that voice searches on Google are now 30 times more likely than text searches to be action queries so retailers should see a strong return on investment (ROI) when investing in voice technology. It also helps with search engine optimisation (SEO) and can put retailers into Google’s answer box, a coveted place for search engine marketing.[iv]
Real-time AI: the backbone of live streaming
Live-streaming was already booming in China before COVID-19, but after the outbreak and lockdown, it went into overdrive, so much so that Chinese delivery services could hardly keep up with all the orders. Once the lockdown ended, senior officials in Hubei province, the epicentre of the outbreak, live-streamed on TikTok as part of the “Mayors Show Hubei to You” campaign that attempted to revive economic activity in areas hit hardest by the pandemic.
After an introduction by Wuhan government official Li Qiang, who waxed poetic about his love for hot, dry noodles could now return to eating at his favourite local restaurants. Mayors from 13 other Hubei cities followed, each promoting their unique and local products.
Live streaming would not be half as effective without AI. Image recognition, as well as character and text recognition, can quickly categorise products and their attributes, which helps the retailer understand not only what is selling, but why it is selling. AI can help enormously with inventory management and product attribution. For example, Walmart uses real-time AI to adjust inventory based on what’s happening on both a micro and a macro level.[v] Inclement weather forecasts combined with diagnostic analytics of items that sold well during pervious rainy or hurricane-like events would be stocked and items selling during sunny times would be minimised. COVID-19 merchandise, like toilet paper, face masks, PPE, hand-sanitisers, disinfectants, alcohol that is less likely to sell when it rains based on the company’s data, is taken off the shelves.
AI to automate
Before COVID-19, businesses the world over spent billions of dollars to transform their businesses into lean, digitised, highly automated operations.
Over the past few years, companies
[iii] had goals of reducing their workforce by 5-or-10%. Automation will help workers become more productive and will free them from repetitive work, giving them more time for creative tasks – something humans do better than machines.
Richard Liu, founder and CEO of Chinese e-commerce company JD.com, hopes to one day have a completely automated company – 100% operated by AI and robots. And the company has invested $4.5 billion to build an AI centre in Guangdong, China, to implement such a strategy.[vi]
AI for supply chain management is nothing new as ML has been used to improve demand forecasting since the early 2000s. Demand planning applications rely on a series of algorithms to take historical shipment data and turn it into a forecast. One algorithm might work better for promotions, another one for the end of life products and so on.[vii] The machine looks at the forecast, compares it to actual shipments and then suggests when it may be time to move from one algorithm to another for a specific stock keeping unit or product family.
AI is a long-term investment
While not trying to sound too apocalyptic, a post-COVID-19 world will probably look considerably different from our pre-pandemic world. While AI is making great strides in helping find a COVID-19 vaccine, it is also providing a massive boost to e-tailers. While social distancing will probably be with us even after the pandemic, the experience of ordering online should continue to rise. It is a time for retailers to capture new customers and provide a unique service that will make them return again and again.
In times as challenging as these, the importance of family, friends and trust in government and business go a long way to making us feel safe. Loyalty is paramount, and retailers who become part of the solution rather than the problem should see their customer base grow. It is one of those rare moments when we all come together and realise it and the answers to our problems come quicker when we work together. AI is a long-term investment, but it should be a positive-ROI if retailers utilise it to increase efficiency, help employees to use their time better, reduce human error as well as make them more proactive. ■
Andrew Pearson is the managing director of Intelligencia, a Hong Kongand Macau-based software consulting company that works specifically in the retail, esports, gaming, hospitality, aviation, manufacturing and travel industries.