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  • Writer's pictureChesapeake Group

Generative AI in the Retail Sector


Retailers are constantly searching for solutions that can quickly integrate with their existing marketing technology stack given the impact of downward revenue pressure, high inflation and labor market disruption heading into an uncertain retail and economic environment in 2023.

Generative AI based digital marketing technology can be leveraged to enhance personalization and better engage customers, driving both top and bottom-line business growth.

What interests the retailers …

AI in the retail sector is fueling faster corporate decisions in product management, marketing, e-commerce, and other business domains by reducing the gap from insights to implementation. The growth is fueled by factors such as the constantly rising number of internet users, smart devices, the need for surveillance and monitoring at a physical store, and government policies toward digitization.

Generation Alpha, also known as Gen A, is poised to be the largest and most technologically connected demographic in history. Experts describe Gen A as wanting to be active participants in practices, along with wanting to play a part in finding solutions. It translates into new ways of interacting with this emerging generation.

Companies are excited about the prospect of AI-generated, personalized communication. Until now, much of the AI-powered technology — like chatbots — were not especially relevant. As the next generation of AI computing power takes root, experts believe retailers will be able to deliver personalized and relevant digital marketing messages, enhanced by first-party data, that not only cuts through digital noise but, more importantly, drives conversion.

Progress has ramped up over the last 12 to 18 months, and both new and improved AI applications across multiple disciplines have made this technology essential for retailers. This has been possible in part due to recent advancements in quantum computing chips.

Recent advancements:

In Jan-23, Google Cloud has introduced a variety of new and updated AI technologies to help retailers boost in-store inventory shelf-checking, enhance online shopping, provide more personalized search and offer better recommendations.

In Jan-23, Microsoft announced general availability of Azure OpenAI service offering advanced language AI models that can be fine tuned to specific needs for a variety of use case.

In Nov-22, Fractal unveiled its interconnected AI platform, Asper AI, to automate decision-making for CPG, manufacturing and retail industry verticals.

Potential near-term use cases:

Product design: Create unique and one-of-a-kind designs for clothing and accessories

Advertising: Create high quality and relevant content for marketing and advertising

Process efficiency: Use models to optimize delivery truck routing, and making deliveries faster and more efficient

Sales: Generate personalized recommendation for customers based on past purchases and browsing history

Customer data: Generate personalized recommendation for customers based on past purchases and browsing history


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