Podcast Audio Transcript
Mimi: Hello listeners, this is Mimi; thank you for tuning in to yet another exciting and informative podcast from us at Infosys BPM. Today, we are going to see how disruptive technologies like digital transformation and AI is going to transform retail . Our guest today is Mehul Goyal, Industry Principal at Infosys BPM. Welcome Mehul. How are you doing today?
Mehul: I’m doing well, Mimi. And thanks for having me on this podcast.
Mimi: Of course! We are excited to hear your views on this topic.
Firstly, we hear about AI almost everywhere today, don’t we? It’s disruptive almost every aspect of our lives. So, my question is: Are we looking at an AI-infused life in the future? I mean, how much will it seep into our daily lives?
Mehul: Great question Mimi. Thanks for addressing the topic straightaway.
Of course, AI doesn’t need an introduction today, and pretty much anyone with an electronic device has knowingly or unknowingly been exposed to it. However, while it may seem counterintuitive, AI is not a new phenomenon; it has been around since the 1950s when Alan Turing had to devise a test to see if machines could mimic humans. The now-ubiquitous CAPTCHA continues Turing’s legacy.
However, with the advent of learning machines, AI has taken on a very powerful dimension, and we are seeing its widespread application. ‘Bots’ have become the face of organizations; predictive and prescriptive analytics are driving decision-making everywhere; autonomous vehicles have become reality; even researchers are taking suggestions from a GPT on how to accelerate and optimize their R&D efforts.
So, yes I would say AI will be a key ingredient throughout our lives in the future.
Mimi: I see. Well, it can be quite overwhelming I must admit, but at the same time the possibilities are literally endless. Very exciting Mehul.
So, if we come to the world of retail, what implications of AI do you see in this area?
Mehul: Well, I like to think of retail as three parts:
- Firstly, the stores where all the customer-facing action happens (this, you know, also includes digital storefronts like ecommerce sites)
- Secondly, the supply chain from where product-availability in the shelf is orchestrated
- And thirdly, back-office functions which support the business with product planning, talent management, financial, and IT-related decisions.
Each part is reinventing itself with help of the modern capabilities in AI.
Amazon’s Go store is probably the most written-about story of AI-powered storefront transformation.
But less flamboyant use-cases are also quietly becoming more mainstream. Computer-vision-aided algorithms, for example, have become an able ally in monitoring and detecting unwanted situations like stockouts, incorrect product placement, and even pilferage in stores; they even help in activating preventive measures.
Generative AI solutions can also act as a personal consultant and handhold shoppers through their entire shopping journey – Examples include Sephora, for helping shoppers select the perfect makeup shade, and Lowe’s, for helping shoppers navigate their stores efficiently.
Elsewhere, organizations have leveraged AI to become sentient, detecting demand signals from the market or disruptions in the supply-chain and autonomously taking steps to respond to these stimuli. Quick commerce is in fact an entire business model that depends on AI for survival. From the much-touted next-day delivery to same-day delivery and now pushing the edges of possibility with 10-minute delivery in companies like Blinkit, the industry has anticipatory shipping and powerful AI algorithms to thank for this model of business.
Mimi: Those advancements are quite ground-breaking, I must say.
Beyond the actual storefronts and supply chain operations, you had mentioned a third part of retail business – the back-office. How does AI make an impact there?
Mehul:Of course the back-office, how could I forget that!
While the first two focus on experience and effectiveness of decisions, this part of the retailer is all about speed and efficiency of operations, and AI is making a massive impact in the back-office.
With the right training, agentic AI solutions can execute entire processes end-to-end. For example, why should humans spend any effort in creating procurement templates for commodities and communicate these to pre-shortlisted set of vendors, collecting RFP responses and objectively evaluating them?
Similar, in supplier setup and product setup activities, back-and-forth communications needed to setup a new supplier/product can be entrusted to a Gen AI-powered agent. The back-office, or business-enabling functions, are truly undergoing a spectacular transformation before our eyes, and we have AI to thank for it.
Mimi:“With great power comes great responsibility”, isn’t it? With humans, we have had a time-tested framework – regulations, policies, SOPs, maker-checkers, etc. to ensure failsafe.
How is this going to be achieved if we have a new breed of digital workers?
Mehul: Mimi, that’s an extremely pertinent point. In fact, this is an aspect that is still under development today, and no organization can claim to have ‘domesticated’ the powerful technology.
At its core, AI works when it develops an algorithm in response to assigned objectives and historical or simulated data. Things can go sideways if the assigned objectives are not exhaustive, or are unclear, or if the training data doesn’t cover all possible real-world scenarios. These situations lead to unintended biases in the AI’s decision-making, hallucinations or even illegal behaviour from the AI.
You may have heard of how, infamously, Air Canada’s AI agent recommended a non-compliant way to apply for bereavement fares to a passenger. Or how iTutor Group’s hiring agent developed an unconscious bias and started displaying age-discrimination traits.
Companies today are quite conscious of the risks and are adopting Responsible AI frameworks as they continue to invest in AI. As a result, a lot of progress is being made in developing new capabilities like AI model management testing, audit and continuous monitoring, data governance and specialized AI risk management software.
Besides Responsible AI, we also have to keep an eye out for the environmental costs of the massive computing capacity required to run these powerful AI models, and hence ‘sustainability’ is another aspect to manage in our framework.
Mimi: I agree completely. AI risk management and sustainability are quite widely talked-about issues today.
Mehul, can we do some crystal-ball gazing? What will the next frontier of retail business look like?
Mehul: Look, we are living in exciting times, where technology is evolving at warp-speed and unlocking new possibilities every other day. While it’s impossible to predict anything very specifically, there are clear implications for some parts of the retail business to witness transformation.
For example, the relationships between shoppers and retailers, and that between retailers and suppliers, is going to become extremely close. Unprecedented levels of collaboration will follow which will positively affect shopping experiences on one hand and supply-chain efficiency on the other.
Mimi: Got it. So in short, we are on the lookout for an exciting albeit challenging future for retail powered by AI.
Mehul, thank you so much for coming to our podcast today. It was a very insightful discussion.
Mehul: Thank you Mimi. It was a great pleasure to be part of this podcast.
Mimi: Dear listeners, if you enjoyed our podcast today, please don’t forget to subscribe to it on the platform of your choice; our podcasts are available on Apple Podcasts, Spotify, and several others. Please don’t forget to share and like it on social media.
Also, if you have any queries, do reach out to us through the Infosys BPM website – www.infosysbpm.com.
Once again, thank you for tuning in, stay safe and sharp. This is Mimi signing off. Have a great day!
