This article was originally published in Retail Week on 17th June 2024.
Few topics in retail are generating as much focus as AI right now.
Since the launch of ChatGPT in November 2022, it seems that corporates, including retailers, have become mesmerised by the possibilities this wave of innovation can deliver.
There is good reason for this – it appears inevitable that AI will become prevalent in virtually all areas of the industry value chain.
A central challenge for companies, however, is to create methodologies for identifying the best opportunities, capable of driving rapid and tangible return. Distraction – shiny object syndrome – is a real risk.
There may be more immediate value to capture through prosaic solutions, optimising core operations by automating repetitive tasks in back-office functions
At True, as a function of our investment activities and the advisory support we provide to retail and consumer companies, we see literally thousands of sector-relevant technologies each year.
A large and growing number of them claim to be powered by AI and, while hype tends to be drawn to customer-facing activations powered by generative AI, there may well be more immediate value to capture through more prosaic solutions, optimising core operations by automating repetitive tasks in back-office functions.
Some examples. C2FO is a company we have admired for many years – optimising working capital and driving material, measurable profit improvements while also putting suppliers in control of terms.
The technology behind it isn’t headline-grabbing but the results are phenomenal, and it helps build closer relationships between corporates and their suppliers, which is as important as ever in a turbulent retail ecosystem.
For businesses with complex supply chains and/or international operations, Statement presents a compelling solution, utilising advanced technology to process large volumes of transactional data, increasing efficiency, bolstering financial visibility and enhancing real-time, data-driven, strategic decision-making. It’s a relatively young company, founded in 2022, but we are already seeing it drive value for corporates in our industry.
AI can also deliver benefits at the customer-facing level, and it would be wrong to suggest that all the immediate opportunities will be back-of-house
Legal processes are notoriously labour-intensive, and Luminance is an AI platform with a large language model trained on more than 150 million legal documents. This enables legal content to be reviewed and created – it can even automate contract negotiation – with high accuracy and domain-specific contextualisation. It is already working with some of the largest retailers in the world.
Of course, AI can also deliver benefits at the customer-facing level, and it would be wrong to suggest that all the immediate opportunities will be back-of-house.
In the marketing realm, we’re seeing Pixis gain considerable traction – it uses AI to drive marketing efficiency and effectiveness, with modules in performance, targeting and creative. As a no-code solution, it is a light lift to trial and integrate and routinely delivers 10% to 15% efficiencies in top-to-bottom funnel KPIs.
Persado is another in the generative AI space that we see delivering great value – it automatically generates best-performing, personalised marketing content in real time, working with retailers such as Marks & Spencer, Carrefour and Gap to increase conversion by as much as 5%.
Finally, by way of real-life example, we’re increasingly impressed by the revenue uplifts that can be accessed via Noibu – a tool that identifies, prioritises and offers code-fix solutions for ecommerce site errors.
It’s preventing revenue loss in our investment portfolio companies and across many corporates we work with. On top of this, it frees up costly engineering resource to focus on creating new offerings instead of just patching the old.
Are your corporate culture and organisational processes amenable to test-and-learn methodologies where success is not guaranteed?
Given the array of technology solutions that exist in the innovation ecosystem, the challenge for retailers and brands is not one of opportunity, but one of navigation.
What is your strategy for identifying, validating and testing new technologies? How coherent is your approach to prioritising opportunities? Are your corporate culture and organisational processes amenable to test-and-learn methodologies where success is not guaranteed?
These are exciting times – quantum leaps in technological capability are enabling IT to become a genuine differentiator for business, offering scope for improved customer experiences and enhanced operational efficiency. But it won’t happen by accident.