What added value does generative AI offer for retailers and suppliers?

Microsoft executive Jim Norred said in a presentation at the Total Store Expo on Saturday that artificial intelligence is likely to be the greatest technological development of our time and holds great promise for retailers and suppliers.

Norred, general manager of retail, consumer goods and gaming at the tech giant, spoke about the transformative impact of generative AI on retail, giving examples of how retailers across industries are already using the technology for personalized marketing, demand forecasting, supply chain optimization and more. “I really believe it's going to really change the way we think, the way we judge and the way we learn,” he said.

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Norred said retailers are actually in a unique situation since the pandemic changed the landscape. They now have to deal with consumer pressure to create new shopping experiences, delivery expectations, better customer service expectations and disruptive supply chains. “All of this, I think, has put retail in a situation where it's been forced to do more and it's just been under a lot of scrutiny. So it's really created a unique situation for retail.”

As a result, every company is trying to figure out how to adapt to market changes and how to use AI to be potentially disruptive, Norred said. The pandemic, he explained, forced retailers to invest in their digital foundations and “empowered them to move faster than so many other industries.”

Norred pointed to some companies that have successfully implemented AI at full scale in their organizations, including Walmart, Facebook Meta and Apple, and offered advice on how other companies can approach integration.

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1. AI is not a panacea, so don't invest in it just for the sake of investing. “I would advise you to look for ways to align AI with your business strengths. See how it can help you.”

2. Think about how AI can improve your business. “Where can I get more visibility or shorten cycle times so we can be more efficient? Think about how you can reinvent the customer experience” or how you can differentiate yourself from the competition or get faster.

3. Take it slow. It's a journey, but it can also be a catalyst for transformation. “I would advise you to think about it in small groups,” Norred advised. “Don't try to look at your entire organization and figure it out. In many cases, you have data stored in many different places, so think about where you can add value quickly. Embrace the technology, don't be afraid of it.”