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style="text-align: justify; color: #00245d;">In recent months, Generative AI has increasingly been in the spotlight, emerging as one of the most promising technologies for digital transformation with broad applications. OpenAI’s ChatGPT, introduced in late 2022, is an excellent example of artificial intelligence capabilities. Although not based on human logic, it uses probabilities to generate reasonable and human-like responses based on available data.</p> <p style="text-align: justify; color: #00245d;">The power of Generative AI though, extends beyond chatbots. The retail industry can greatly benefit from utilizing Generative AI in various applications, including communication design, supply chain optimization, and automation of e-commerce workflows. Even smaller businesses can take advantage of this technology as its implementation cost is often minimal.</p> <p style="text-align: justify; color: #00245d;">According to Accenture’s <a href="https://www.accenture.com/us-en/insights/technology/technology-trends-2023" target="_blank" rel="noopener"><span style="text-decoration: underline;">Technology Vision 2023</span></a> report, an overwhelming majority of retail executives (96%) express strong enthusiasm for the new possibilities offered by foundation models (the technology supporting Generative AI applications like ChatGPT). The same research revealed that over 90% of executives believe foundation models will play a significant role in their retail strategies for the next three to five years. Moreover, more than 50% of respondents have already started exploring experimental applications of Generative AI in areas such as customer support and process automation.</p> <h2 style="font-family: calibri; color: #00245d; font-weight: bold;">Enhancing customer experience through conversational commerce</h2> <p style="text-align: justify; color: #00245d;">Generative AI can significantly enhance the customer experience through conversational commerce. This technology allows brands and businesses to integrate Generative AI into their digital environment to provide more personalized and effective search capabilities. Conversational product search, powered by Generative AI, accelerates the search process and suggests options that best match the customer’s profile by analyzing their search history and focusing on reasonable next choices for everyone. This, in turn, can lead to more rapid purchases, improved conversion rates, and enhanced cross-selling. For example, under a blog post about camping, relevant product recommendations can be displayed, eliminating the need for the customer to wonder what is required when planning a relevant activity.</p> <p style="text-align: justify; color: #00245d;">Additionally, Generative AI can bolster support through chatbots, offering sophisticated responses tailored to each customer’s needs and personalized interactions that align with the retailer’s and brand’s style and tone of voice. This greatly surpasses the limitations of traditional chatbots (usually relying on a limited number of pre-programmed scenarios) and creates an entirely new communication and support experience for customers, making them feel like they are interacting with a human and ensuring a higher level of service.</p> <h2 style="font-family: calibri; color: #00245d; font-weight: bold;">Optimizing supply chain operations</h2> <p style="text-align: justify; color: #00245d;">The conversational capabilities of Generative AI can enhance interactions between humans and machines in the supply chain sector. For example, Generative AI can provide real-time package tracking information, responding to customer queries more quickly and accurately. It can also optimize packaging processes by analyzing and calculating product dimensions faster than a human, thereby reducing the overall time it takes for a shipment to reach its recipient.</p> <h2 style="font-family: calibri; color: #00245d; font-weight: bold;">Automating content creation in e-commerce back-end</h2> <p style="text-align: justify; color: #00245d;">Generative AI can improve the customer experience not only on the front-end but also automate workflows in the e-commerce back-end. It can automatically generate consistent and accurate product descriptions and create personalized graphics by analyzing text descriptions and data from images, eliminating the need for new photo shoots. Additionally, Generative AI can assist in generating website content, improving e-commerce support processes, and freeing up employees’ time for other business tasks. This efficient solution allows businesses to focus on more strategic initiatives and increase their productivity as needed. It can be useful even for retailers that have a website but not necessarily an e-shop, as AI-generated content can be applied for advertising purposes (e.g., brochures, posters, banners, etc.) in digital or printed format.</p> <h2 style="font-family: calibri; color: #00245d; font-weight: bold;">Addressing challenges</h2> <p style="text-align: justify; color: #00245d;">While Generative AI offers numerous possibilities for retail, it is essential not to overlook the risks and challenges it may present. Artificial intelligence models like ChatGPT may currently provide answers that appear correct and reliable, but they may not always reflect reality. Therefore, careful verification and content review are necessary in every case. Furthermore, the development of a regulatory framework governing the use of Generative AI is underway, and its operation and use may change in the very near future. Such regulation is essential to provide guidelines and ensure transparency in the use of this technology.</p> <h2 style="font-family: calibri; color: #00245d; font-weight: bold;">Startups and investors embrace AI</h2> <p style="text-align: justify; color: #00245d;">Generative AI is a powerful tool with significant potential and prospects, and as it continues to evolve and shape the industry, we can expect to see more and better applications of it in the retail sector. Moreover, investments in startups developing artificial intelligence solutions are continually increasing. According to data from the Organization for Economic Co-operation and Development (OECD), investments in startups involved in Generative AI skyrocketed in 2023 and are projected to surpass 45 billion dollars worldwide. 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