“Generative retail will span out in the next one or two years and prevail for the next 10 years.”Piyush Chowhan, Seasoned CIO, Retail Transformation leader
What are your views on usage of GenAI in the retail sector?
We are in the space of customer experience, and we believe that Gen AI will play a very important role in understanding customer behavior in terms of engagement with the customer in terms of driving long duration, personalization impacts with the customer. So, I feel that it’s a very, very promising technology in which we can actually enhance and redefine the whole customer experience for all the various formats of retail which are there – big grocery retail, bit fashion retail or even e-commerce. I am very excited. There is many players which are coming exhibiting things around AI. And I believe that we are just starting the journey as an industry and we have a long way to go, but I’m very excited that there is a lot of potential.
Are you as a user of technology experimenting with AI or Gen AI kind of technology?
We have started. It requires defining the right use cases. It requires creating the right data sets in the company. It requires a few things from a base building. And we’re working on those and then we are trying to do some PoCs around it. I would not say that we have done a lot in terms of rolling it out. It’s still in its nascent stage and I believe that there is a long way that we can go forward.
From your experience, what are the essential building blocks of, you know, having a good AI outcome or for that matter, what do you think are the critical differentiators in having, you know, in being able to leverage Gen AI effectively?
I think that is where a lot of organizations are struggling. They just start with the end user interface. But for that end user interface to work effectively to me Gen AI is not limited to ChatGPT. People sometimes synonymously use ChatGPT and Gen AI. It is a much larger domain.
It can have a lot of impact on the backend operations as well.
That is correct. So, there is a whole new era of artificial intelligence, which is kind of abstracting the human mind and human behavior. And to me, that opens a huge opportunity of defining the ways of understanding retail, the defining the ways of understanding the customer. So, it will impact not only the customer experience, but it will impact even the operational excellence within the enterprise. A lot of marketing content can be generated through generative AI. A lot of large sets of data can be processed using algorithms. There is a huge opportunity that we see which can be used with the Gen AI.
Customer experience is the ultimate goal. But like we said, you know a lot of other things need to fall in place. So, in your experience, in the retail sector, what aspect of operational challenge you know in terms of technology companies are facing with in the retail sector? Is it the supply chain or is it the management or is it the inventory?
The entire model of retail is being relooked at and with the advancement of newer things which are coming in the way you plan, the way you buy stuff, the way you drive your decisions, is totally going to change. Earlier, people used to work on Excel sheets, which people still do. It’s a fantastic tool, but those kinds of things need to be upgraded to the machine. So, the ability of machines to churn all that data, understand human behavior and then replicate that within their models is what they want to look at.
Tell us about your experiences there as you are a hands-on person of changes. Are you seeing how should the business model adapt to a phygital environment?
As you would have seen, there was a big boom of digital retail or e-commerce in the past few years because of COVID. That has totally flattened out this year. We are seeing either a decline or flattening out of e-commerce. Why there is a limited potential of that is it cannot run just as a different channel. It has to be integrated with the physical channel, which is what it leads to in terms of building a phygital model or in past it was called as Omni channel model. True integration between physical and online needs to happen. It’s not two different channels, but a kind of a union of both the channels interlinked very, very closely into each other so that you are able to develop and manage that. I believe that also is something which will take off and boom in the next few years. All the e-commerce players are now opening up physical stores – across the world because they believe that physical is where the real play is. People want to move around. People want to go and shop, and that trend is not going to die any time soon.
When as a business you are moving into digital and digital is moving into phygital, what sort of operational challenges companies are grappling with?
So, it is a complete change management. It’s a new way of working because the online trends are very different from the physical trends. So how do you merge? Online buying behavior and offline buying behavior are very different. So how do you merge all those things? So, these changes are happening. As I speak to a lot of retailers worldwide, what they are saying is it’s no longer the online team and the offline team. They are trying to merge the teams together. They are trying to do the planning together. They are trying to do inventory in one place. Earlier there was a different channel for online inventory and physical inventory. I think those mergers are happening and this will absolutely continue in the future to create a true Omni channel. We have been just talking about a superficial Omni channel. Now this has become a true Omni channel experience.
There will be a lot of blending of skills, do not you think so?
That is correct. I think people will have to embrace two things – one is digital within every aspect of their planning and activities, and the second is use of data. So, data-driven decision making is going to be very, crucial. The new skill in today’s world is going to be to play with data, play with algorithms. And what I have, I’ve been coining this term for a long time, what I call as generative retail in which there are machines which will do a lot of decision making for retailers and that is the concept of generative retail which I believe will span out in the next one or two years and prevail for the next 10 years.
Is it possible to monitor these generative models?
It is still working in silos. For example, there is replenishment model, there is customer churn model, there is customer buying behavior model, etc. They are not speaking to each other still. What is happening is now the customer is a customer. He does not think about inventory. He does not think about choices. He does not think about delivery separately. While enterprises take those decisions separately. What I believe is that how can we link everything towards a good customer experience is where the whole journey is and that is the transformation, which is happening, and we are leading it in the region, and I speak to a lot of retailers and a lot of retailers are trying to invest the time and effort into building this integrated view of the customer. So that they can serve the customer as one customer.
But what about model drift?
I think there was a handicap because enterprises don’t have good data. The data is siloed and so your decision making is siloed. All enterprises need to build a modern integrated data platform, which integrates all the data – either the customer view of the data, the supply chain view of the data, the inventory view of the data, etc. All that data needs to be all pulled together and brought into a very, very unified model. And once you do that, then only that Gen retail can come into play without silo data you will never be able to create what I am talking about.