From chatbots to product descriptions, how AI is already working in retail

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This month, Amazon revealed that brands selling on its platform in the US would put AI to work to capture the attention of potential customers.

The e-commerce giant unveiled a new tool that lets retailers that sell through Amazon pop a few details about their products into the system, leaving AI to whip up shiny product descriptions that include all the details a shopper might need before they hit “add to cart”.

Mark Coulter is the chief executive of Temple & Webster. The company’s online customer service for shoppers is carried out by AI. Credit: Oscar Colman

Amazon said its AI models, which use machine learning to crunch huge amounts of data, can work out the details of products on their own.

“For example, they can infer a table is round if specifications list a diameter or infer the collar style of a shirt from its image,” vice president of Amazon Selection and Catalogue Systems, Robert Tekiela, said in a blog post.

The product description tool is not available in Australia, but Amazon has been investing heavily in AI for years and uses machine learning processes across several other parts of its business. The company’s “Just Walk Out” cashier-free technology was launched at Melbourne’s Marvel Stadium this year. It lets footy fans pick up snacks and head straight back to their seats while AI works out what items they’ve taken and what to charge them.

The impact of artificial intelligence on the retail sector has been a hot topic for years, but it’s only recently that the industry has started to understand which AI uses add value.

A lot of this shift has to do with generative AI – or artificial intelligence that can create content, from words to images to apps. The rise of tools such as Chat GPT has allowed consumer brands to experiment with handballing a range of tasks over to virtual assistants.

ASX-listed online furniture and homewares retailer Temple & Webster told its investors during its financial results in August that it is looking at how to use AI “across all of our customer interactions and internal processes”.

Artificial intelligence currently “enhances” product descriptions across the 200,000 items on its site, while Temple & Webster’s live chat function, where customers ask questions about a product before they buy it, is also operated by AI.

Chief executive Mark Coulter said the use of the technology was already delivering dividends.

“We’re seeing strong impacts on conversion rates, but also, when we’ve deployed it, we’re seeing improved customer interaction,” he said.

Commerce lead for Accenture in Australia and New Zealand, Peter Davias, said brands were increasingly looking to outsource tasks such as product listings, which otherwise take their human workers hours to build and update.

“If you’re a retailer and you’ve got hundreds of thousand of products available on your website, you’re relying on your suppliers to provide you with information. And a lot of the time … you need to fill in the gaps,” he said.

“We see a lot of retailers using generate AI to populate a lot of those missing elements, to ensure their shoppers have a great experience.”

The boom in big data, analytics and artificial intelligence has also captured the attention of bricks-and-mortar retailers that are using the tech for everything from produce management to rostering.

The focus on data is also driving demand for a new type of tech-savvy retail worker, and prompting local employers to upskill their staff to get ahead of the trends. In 2021, Woolworths launched a $50 million “Future of Work” fund to train workers in areas such as machine learning, data analytics and robotics.

Some of these initiatives, such as the rollout of AI-powered self-serve checkouts at the big two supermarkets, which are designed to identify if the wrong product has been scanned, have sparked concerns from privacy advocates about the types of information they collect from customers.

But businesses are also increasingly trialling AI tools to help drive their operations in ways that might not be immediately obvious to the consumer.

Retail giant Amazon is continuing to roll out AI tools for its sellers. Credit: Dominic Lorrimer

In 2021, Coles partnered with tech firm RELEX to implement an AI-powered ordering system that better forecasts demand for fruit and vegetables. Woolworths, its major competitor, owns a majority stake in data science business Quantium with which it runs a data and analytics business called WiQ.

Big data sets are also helping retailers work out where to place their staff when they come to work.

“Increasingly we are using AI to help us forecast when our stores are busiest, allowing us to make rostering decisions that ensure our customers get the best level of service,” a spokesperson at Dan Murphy’s operator Endeavour Group said this week.

“This is especially important going into the busy summer months.”

Dan Murphy’s has a team of price hunters who log on to track the cost of hundreds of drinks across the Australian retail market, with a plan to beat its competitors on price.

However, Davias said price tracking would one day become the domain of artificial intelligence, too as retailers across the globe look to outsource that data crunching to automated tools.

“We see a lot of clients that use AI tools for competitor pricing … go around and see what everyone else is selling a product at, and [ask] how does that then inform their pricing decisions,” he said.

Liquor retailer Dan Murphy’s is using predictive tools to make decisions on rostering.

A recent holiday retail survey from consulting giant Deloitte, released this week, suggests that, while AI tools haven’t dominated the retail landscape yet, many brands are already weaving the tech into their everyday businesses.

Forty-one per cent of the retailers the group surveyed reported already harnessing AI, with more than one-third of those building solutions based on ChatGPT.

Customer service chatbots are the most frequently used tool, but 14 per cent of businesses say they are already using generative AI to help with supply chain management, 10 per cent are using it to help guide their pricing, and 5 per cent are leveraging it for product design.

Deloitte’s team says as the uses become more sophisticated, there’s no doubt local retailers need to start building their fluency in AI – if they haven’t already.

“By 2030, generative AI will have had a bigger impact on retailers than the internet or smartphones,” the group said in their report this week.

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