Exploring the Potential of Generative AI in Retail: Insights from Jill Standish
Jill Standish leads the global retail practice at Accenture, and works with retailers to help them rebuild and “reinvent their businesses” in a future-ready, responsible and sustainable way.
Here, Standish shares insights into new technologies such as generative AI, which has the potential to radically change how retailers and brands run their businesses.
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WWD: At the NRF show early last month, there was a lot of buzz about generative AI. What’s your take on it?
Jill Standish: Retailers and brands need to ask what gen AI means for them. They need to ask: “How do I apply it in the right way for my business?” At the show, there were some thoughts around what does gen AI mean for not just my company, but for my people.
Gen AI is not going to take someone’s job away, but someone who knows gen AI will. So, I think we’re seeing it positioned now in a very thoughtful way; around making jobs better and easier. I’m using gen AI in my day-to-day life now. I use a variety of tools to enhance how I get work done. I’ll write an e-mail and then I tell the generative AI tool to make it a little less harsh and it does so.
WWD: What about retail applications?
J.S.: Generative AI can be used in many ways. But if you’re using it, it should be in a thoughtful and relevant way. For example, if you’re using gen AI in conversations with consumers, but if you don’t sell something — who cares? When using gen AI, such as recommending something through a chatbot, it should be linked to inventory. AI has to be linked to what you have for sale right now.
Generative AI can make work and people’s lives better. For retailers, there are some key questions to ask: Can we use it to cut down on returns? Can it be used to trigger conversations with the consumer? Should it be used at a call center? Again, the application of gen AI should be relevant to your business. And if it’s for engaging the customer, it has to be on the corpus of your data and products. If it is tied to ChatGPT or others, it’s not going to recommend your products.
WWD: What should you consider when thinking about investing in generative AI?
J.S.: Gen AI and AI in general are part of “New Age tools” that are available. But you have to get rid of your tech debt in order to train and use these tools. Retailers need to create a clean digital core. This means getting rid of the old, point solutions that, over time, have evolved into a spaghetti mess of multiple single-point solutions. So, you start with a common core platform, such as SAP or Oracle or whatever.
Retailers have been spending 5 percent of revenue on the old tech. And 70 percent of that is just to keep the lights on. There’s no innovation there. And you can’t apply the new technologies, such as gen AI. The technology has to be updated, and that will allow retailers to get that 5 percent spend down to 2.5 or 3 percent. But you have to cut your IT spend at the same time you got to take out this debt — and that’s a tricky dribble.
WWD: Industry analysts estimate returns can reach nearly 70 percent for some categories. As a way to mitigate it retailers are cracking down on returns. Happy Returns, the logistics company, came out with a report that said 81 percent of retailers and brand are now charging a fee for some returns. But it is still a costly problem. What can be done?
J.S.: Retailers and brands need to use a “carrot and a stick.”
Generative AI can help. Amazon is working on a sizing solution using AI. When ordering apparel, it will help pick the best product. So, customers don’t have to order four sizes and return what doesn’t fit. So that’s the carrot. Customization is another carrot, which could be something as simple as getting your initials monogrammed on a product.
The stick, which some retailers are trying to use, is charging customers restocking fees and having them pay for shipping. But it is tricky because retailers fear losing customers that way.
There’s a small boutique near where I live, and they no longer give money back for returns. Instead, they give you a store credit. For smaller businesses, they just can’t run a business that way.
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