Some Sobering Truth About AI
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We don’t do a lot research on specific technologies. We like to look at a topic (merchandising, the supply chain, etc), and then within that context, examine the new tech toys that are in play. But for the past few years, AI has been such a talking point in our industry that we’ve felt like we’ve had to. And when we compare what stands in the way of addressing the opportunities that come from greater use of AI-enabled analytics in comparison in our most recent AI report (which came out just a few weeks ago), to the last time we conducted this research (during the height of the pandemic in the summer of 2020), the answer is simple: as retailers have learned more about AI, they have developed a more sober assessment of what stands in the way of adoption (Figure 1).
Figure 1: Help Wanted
Source: RSR Research, October 2022
Retailers don’t have a whole new host of internal roadblocks to overcome – quite the contrary. Their problems have simply heightened. Their number one challenge is still that they need help understanding how they can use all of the new data they are collecting, specifically the non-transactional data that is “new” to them.
For example, what are retailers to do with a sentiment expressed on Facebook? Determining context, alone, is still remarkably challenging – even Facebook’s own hyper-advanced AI tools still can’t even get that part accurate. And the idea of making intelligent decisions based on the troves of data streaming in from search engines can be overwhelming. Retailers know they need help, more than they even did a few years ago.
While it’s encouraging to see fewer retailers report budgetary constraints, that can only be expected; the last time we conducted this research in 2020, AI enablement was still a new topic for many retailers. As a result, the fact that so few retailers had earmarked budget for AI technologies in the summer of 2020 was hardly surprising.
Pictures Bring Stories To Life
If you’re a regular reader of our content, you’ll know that RSR recently concluded its first ever study on next- generation key performance indicators, How Retailers Are Operationalizing Analytics With New KPIs. One of the main takeaways from that report was retailers’ opinion that if new analytics are to mean anything, they need to be visually interesting: particularly to executives. From that report:
Our retail respondents are clear: in order for the impact new KPIs enable to reach maximum effectiveness, they must be presented in a manner that works best for key decision makers. Clean and simple layouts are paramount. Line of business executives are often-times quick to dismiss overly technical data presentations (regardless of how impressive they are or how much work went into them), and therefore dashboards that make huge swaths of complicated data inherently actionable hold the most favor.
Today, in Figure 2, below, retailers echo this sentiment. When it comes to AI, highly visual presentations for decision makers are the best way to get past the vast array of hurdles they have defined.
Figure 2: A Picture’s Only Worth A Thousand Words When It’s Mobile
Source: RSR Research, October 2022
It is surprising to find was that providing decision makers with mobile access to those compelling visuals was equally important as the graphics, themselves. But our respondents are clear: big decisions are being made by executives at any time of day. If the benefits of AI are to be leveraged, they not only need to make the results of complex analytics easy to consume, but they also need to be available via a mobile device anytime and anywhere there’s Wi-Fi or cellular connection.
This is a big deal. We recommend that everyone read the full report (it’s free – here).