Retail Marketing Summit: AI is ‘the disruption of the disruption industry’ and here’s what retailers should do with it
The factor that will make or break a retailer, according to Dentsu Solutions’ CEO Chris Bower, is whether and when it will use AI technology to its own advantage.
Speaking at Mumbrella Retail Marketing Summit, Bower unpacked how generative AI or its broader use in natural language processing (NLP) can present both risks and opportunities for retailers. While these impacts are somewhat inevitable, Bower said retailers who win “are going to be the ones that can accelerate their own transformation and use this technology within their ecosystems.”
Bower at Mumbrella Retail Marketing Summit yesterday
“AI will be the disruption of the disruption industry,” he told the crowd at Sofitel Wentworth Sydney yesterday. “What I mean by that is until recently, to digitally disrupt an industry, you needed to have a great idea, and you need to know how to code it.
“But now – with GPT-4 especially, but also ChatGPT – anyone can code, anyone can disrupt.
“The implication here is that a big part of the retail value chain is under threat: It’s going to be challenged, and the number of people that can challenge that has gone up by thousands and thousands of times.”
He stressed that trust is an important element in this conversation. If consumers trust AI products such as ChatGPT well enough to not only share information about what they want to buy but also why they want to buy it, retailers can benefit enormously by internalising these conversations.
Bower asserted that this could lead to the first potential positive impact of AI technologies for retailers, which lies in the realm of marketing.
“Something we’re doing in Japan right now is using the same technology [generative AI] to create always-on AV testing. So imagine you have two banner ads: You’re constantly changing your text. You’re constantly changing your image. You’re measuring the efficacy of that and you have a self-driving continuous improvement engine.”
NLP, meanwhile, can open up “an opportunity to understand sentiment at scale for retailers”, Bower said.
“Imagine reaching out and scraping data from social media or from blog posts, and being able to identify what everybody really does think about. And not only that, it allows you to pull specific insights and turns of phrases that people are using with respect to your brand. Imagine if you connect that to the generative AI. It becomes a much tighter loop of improvement.”
However, he concluded that the biggest opportunity for AI technology usage lies in the customer experience for retailers.
“This technology allows customers to cherry-pick value, and that’s obviously a threat. But the opportunity here is to redefine and broaden how we define value,” he said.
“For example, maybe I can create tools to optimise my purchasing around the environmental impact of the things, or the calorie counts, or made in Australia, or packing waste, or things I haven’t tried before.
“I think the critical thing here is just reimagining what value can meet your customers, but then leveraging this technology to enter into a dialogue and to be able to understand and deliver that, once again, within your own ecosystems.”
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Darcy Song was a reporter at Mumbrella, covering media owners, adtech and social platforms. She left in October 2023.
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