From Bell to Bezos: Why AI in Retail is Important

In this blogpost, Martin Schofield discusses innovation and the importance of embracing it. AI in retail is becoming increasingly prevalent, and Martin outlines the impact it will have.

In 1876, an internal ‘Western Union’ memo declared that “the ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” A year later, Alexander Graham Bell, the inventor of said telephone formed the ‘Bell Telephone Company’. Bell’s company eventually evolved into AT&T, one of the largest telecommunications companies in the world.

Western Union’s decision to turn Bell down was a significant strategic misstep. Failing to recognise and invest in the revolutionary communication technology not only missed a monumental business opportunity, but also paved the way for a competitor to dominate an entirely new industry. In many ways, this is the same mistake that some retailers made when they dismissed the potential of e-commerce, clinging to their High Street shops instead of re-thinking their business model. This allowed companies such as ASOS, Ocado, Boohoo and Amazon, to emerge and change the way customers shop.

We have to accept that when it comes to new inventions and ideas, there are two camps, ‘The Innovaphobes’ and ‘The Innovaphiles’. One characterised by their resistance to new ideas and innovations, preferring to keep with traditional methods and avoid change. The others are visionary trailblazers, relentlessly pursuing ground breaking ideas to drive transformational change.

My opinion is that innovation is essential in retail. Afterall, change is the only constant in the industry, and these changes are becoming increasingly disruptive. If you ignore what’s coming next, believing that it’s not going to effect you, you’re aligning yourself with Western Union. You are an ‘Innovaphobe’. Good luck to you.

It’s important to clarify what I mean by being innovative. In its wider sense, innovation means the continuous pursuit of improvement. Creating better results from new ideas that drive progress and create value. Embracing innovation fosters a culture of creativity and adaptability, enabling both individuals and companies to stay ahead of the curve and thrive in an ever-evolving world. Ultimately, innovation is the key to unlocking new opportunities, solving complex challenges, and achieving sustained success. So, in summary, it’s better to be an ‘Innovaphile’.

AI in Retail

The next wave of change that will have significant impact on retailing is AI. It has the capacity to change everything we do, from the supply chain to the customer experience. Imagine for a moment that every buyer, merchandiser, stock movement and fulfilment action is being guided and assisted by AI. Leveraging data to optimise decisions, streamlining operations, and personalising customer interactions. The result is a more efficient, responsive, and customer-centric retail ecosystem. Embracing AI in retail will not only revolutionise the retail landscape but also set the stage for unprecedented levels of innovation and growth in the industry for the future.

Now there will be those reading this who will say that this is all a bit far fetched. The leap from where we are today, to this new world is a step too far. AI in retail will only ever be a bit part player. Adoption levels will be low because it will never replace human instinct. I would like to remind you about ‘The Innovaphobes’ from the early e-commerce era. Let’s park the scepticism, and channel our energies into a critical evaluation of its capabilities, limitations and ensure that our innovations of the future align with the real-world needs and expectations of our customers.

We mustn’t forget that AI is already a part of our customers lives. Their playlists on Spotify, film choices in Netflix are heavily influenced by suggestion algorithms. Their Hive heating and lighting hubs automatically adjusting home environments. And everyone uses Alexa, Siri or Google to time their boiled eggs don’t they? And then there’s the serious stuff, like disease diagnosing, telemedicine platforms to speed up Doctors appointments. Self-drive cars, smart traffic systems, the list is long and growing.

When something becomes part of everyday life, demands grow quickly and new habits are formed. Customers will demand that retailers provide them with the ways and means to use AI in retail as the norm.

There is still room for tradition. If you can’t capture, process and manage comprehensive accurate product, price, inventory and transactional data, then I’m afraid, even if you want to adopt AI into your business, you can’t, because this is an entry requirement.

So, please be more Alexander Graham Bell and less Wester Union going forward. It’s clear that ‘The Innovaphiles’ are the winners in the long run.