Getting on the AI wagon

The recent public spat between Elon Musk and Mark Zuckerberg over the impact of Artificial Intelligence (AI) might represent two polar opposite views, but even the biggest tech moguls cannot deny that AI is set to take over and change the world sooner than one might imagine. Despite the steadfast advancement in the field, one cannot deny that the domain is still in its infancy, so much so that the human mind is incapable of truly comprehending the impact and consequences of changes that will accompany it. And by default, what the human mind is unable to comprehend; it becomes suspicious and doubtful of.

The discourse around machines taking over jobs has gained momentum in the last few years, and intricately woven into this debate is the advent of the fourth industrial revolution. With the survival of businesses on the line, the transition to the new paradigm is of critical importance. Yet, uncertainty, confusion, and skepticism regarding the same are abundant. For the uninitiated, the fourth industrial revolution follows the production revolutions that were aided by industries, fuel and electricity, and digital technology. This new era will see further embedment of technology in societies and even the human body. Already, automation of routine tasks means that human involvement in the production process is limited to that of supervision and remedial intervention, which in the future is also likely to be done by intelligent learning systems.

The report is a great resource to understand how different sectors within retail will be impacted by automation and how to best gear up for the change. It says, “The scope of the revolution is massive, and businesses of the future will feel the impact at every level of the value chain and across the entire customer journey — from their basic strategy, right through to their delivery mechanics.” It successfully drives home the point that up until this point, we have seen the automation of manual tasks like production, order placement, warehouse management and inventory tracking; but from here on, tasks like investment decision making, mass personalisation, product selection, product design, space optimisation, dynamic pricing etc. will also be machine driven. The report discusses the example of Hong Kong Venture Capitalist firm, Deep Knowledge Ventures, which “has already hired an artificially intelligent algorithm to its board of directors. The ‘Validating Investment Tool for Advancing Life Sciences’ (Vital, to his friends) uses a complex algorithm to predict which companies will be a good investment. By mixing human intuition and expertise with a machine’s logic, the company believes it can build the perfect collaborative team.” Vinodh Swaminathan, Managing Director of Innovation and Enterprise Solutions, KPMG, USA, says in the report, “This is not a technology discussion. This is a business strategy discussion; it starts at the top with leadership and stakeholder management.”

Every step of the retail chain, right from attracting customers to production, supply and selling of the product is bound to change with AI playing a larger role. While the use of big data, mass personalization and advent of ‘retail theatre’ to attract more customers and enhance the customer experience is on the cards, physical proximity of consumers will be exploited further for communication. At the production end, the process of designing, pricing, optimizing and selecting a product is set to be automated. Even routine, yet essential, processes like inventory and stocking selection is being outsourced to machines. “The range and volume of data feeds that are used and the ability for the system to learn based on actual performance means that the need for human participation is rapidly diminishing.” These developments also mean onshore production has become more affordable and easy. “Manufacturers that, in the past, moved their operations to China or India are returning to Europe as the processes of production become more efficient and cost effective.”

While all this will obviously result in a decline in the number of manual jobs, it will also provide an opportunity for organizations to focus exclusively on customer experience. The report says, “... but it also means companies can improve their supply chain and cut their costs, with employees freed up for higher value work consumers can receive a faster, more efficient service.” With driverless vehicles, intelligent chatbots, inventory tracking and management systems helping retailers achieve a more optimum balance of labor costs, inventory and availability, one thing is certain that producers and consumers will interact much more dynamically. The mundane grocery-shopping experience is likely to get a complete overhaul, with robots guiding you to your desired product, and softwares predicting what you want before you actually think of it – “an all-channel approach that will ultimately win the day — a 360-degree experience that’s seamless, so all the customer sees is the brand and how it makes them feel.”

Aggressive pricing and promotion strategies and digitization of shopping carts will also add to the change. Drone-delivery, virtual dressing rooms, robotic in-store assistance, doing away with the check-out are some other ways in which retail is set to evolve. The fact that these machines will be able to learn from their mistakes and experiences, and have the ability to emote and respond like humans, thus blurring the difference between the two, is likely to further their adoption at a swift pace. “Creating an online shopping experience enhanced by technology such as augmented reality and virtual reality or 3D is becoming at least as important as providing convenient and personalized ordering, payment and delivery options” says Willy Kruh, Global Chair, Consumer & Retail, KPMG International.

For businesses to be future ready, the report has a simple and important message: “Think Big. Start Small. Act Now... A safer approach for many businesses is to stay more agile — able to define the right areas of capability in which to test innovations, whilst simultaneously remaining focused on your core business.” It says that innovation and experimentation should be based on hard facts derived from data. Furthermore, it advises retailers to have a long-term and short-term vision to respond to trends and deliver agile solutions. “The biggest challenge facing organizations will be creating alignment among senior leadership about what to do and why” it warns. The report consists of a handy and practical checklist that executive teams must follow in order to adapt to the impending changes and also contains examples of retailers who have pioneered innovative AI and are reaping its benefits. Tommy Hilfiger’s digital showroom, Adidas moving its production back to Germany, Autodesk using intelligent

The report consists of a handy and practical checklist that executive teams must follow in order to adapt to the impending changes and also contains examples of retailers who have pioneered innovative AI and are reaping its benefits. Tommy Hilfiger’s digital showroom, Adidas moving its production back to Germany, Autodesk using intelligent softwares for 3D printing, JD.com increasing its supply-chain efficiency, Anheuser-Busch using self-driving trucks, The North Face using a new age shopping app, intelligent robots like Amelia and Chloe being ‘hired’ by companies for their services – it’s all in there!

The report stops just short of answering the million-dollar question about what will humans do in the world where machines take care of everything. However, it does make an attempt. “Creativity is a big part of cognition… when machines can do that, maybe we will be obsolete. But until then — and I think that’s some ways off — I think we have a big future for human beings to do lots of interesting things in the realm of work” says Constance Hunter, Chief Economist, KPMG, US. The report hits the nail on the head when it says that going forward, it will be critical to remember the uniqueness that human touch and emotions

The report hits the nail on the head when it says that going forward, it will be critical to remember the uniqueness that human touch and emotions brings to a process. “.... it’s also worth remembering that humans will always be humans... The trick is to remember that one size rarely fits all. Because ultimately, we’re not machines.... There’s no doubt that the current technological revolution is a time of great innovation and excitement. But, for many, it may also paint a more worrying picture of the future where armies of unemployed drift from one menial task to the next.” A quote by Stephen Hawking best sums up the essence of the report, “... the rise of powerful AI will be either the best, or the worst thing, ever to happen to humanity. We do not yet know which.”