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The Future of Retail: How Generative AI Is Redefining Business Strategy and Brand Experience

Retail and brand leaders are learning how to transform their businesses with AI technology, as reported in the prior WWD article series on generative AI. From customer engagement and experience to improving employee productivity and managing workflows, generative AI has the potential to drive conversions and improve operational efficiencies.

In the last of this series, WWD hears from industry consultants who share suggestions especially suited for the C-suite.

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Goals and expected outcomes

Sudip Mazumder, senior vice president and retail industry lead of North America at Publicis Sapient, said there are several factors “that need to be taken into consideration before retail leaders invest in generative AI to ensure that the investment aligns with their strategic priorities and delivers the desired outcomes.”

“First, they need to assess their current business processes and identify areas where generative AI can add value,” Mazumder said. “It is essential to identify the specific use cases that align with the retailer’s goals and objectives.”

Mazumder said retail leaders also need to assess the readiness of their data infrastructure. “Generative AI relies on large amounts of data to generate new insights and solutions,” Mazumder said. “Therefore, ensuring that the organization has the necessary data infrastructure, such as data quality, governance and security, to support generative AI is critical.”

As that infrastructure is evaluated, executive decision-makers must also assess human capital needs before implementation. “Retail leaders need to consider the skills and expertise required to implement and manage generative AI, including data scientists, machine learning engineers and software developers,” Mazumder said. “They should look at their current capabilities and identify gaps that need to be addressed through training, hiring or augmenting using partners.”

A ”strategic imperative”

Howard Meitiner, former chief executive officer of Sephora who is now managing director at Carl Marks Advisors, told WWD that while the investment costs for mid-market retailers may seem high, investing in AI “is a non-negotiable strategic imperative because it is at the very heart of future retail success and competitiveness.”

And while it may be essential to have machine-learning engineers and software developers on hand, as Mazumder suggests, generative AI can take on greater tasks, according to Meitiner, who said it’s important “to consider the benefits that investing in AI can generate. One key area is in data analysis. Many retailers have lacked the technical capability to truly exploit the information contained within company databases for insights to drive new initiatives. With AI, they can generate such insights by clicking a button, reducing administrative burdens and making forecasting easier and more accurate.”

Meitiner said improving the experience the company provides its customers “will become increasingly important and one of the key differentiator and success drivers. The labor savings generated through AI deployment in other business areas can provide funding for retailers to invest in better, human-centered customer service initiatives.”

“Companies that embrace these kinds of strategic moves will increase the likelihood of them being a winner in the coming year,” he added.

Better brand experiences

Tom Ajello, senior partner for experience, innovation and engineering at global creative consultancy Lippincott, has recently worked with retailers and brands to help with AI and digital strategies, and cites Walmart, Coach, Sephora and The Body Shop as former clients. Ajello told WWD that investing in generative AI is more than a strategic decision; “it’s a declaration of leadership in the new era of retail. It’s about setting a course for a future where technology amplifies creativity, enriches human connections and redefines the essence of brand experience.”

And that brand experience also has a more personal and creative dimension, including the forging of more authentic connections. “In an age where digital experiences often feel detached, generative AI offers an unparalleled opportunity to craft more genuine, engaging interactions,” he said. “By leveraging AI to understand and anticipate customer desires more deeply, retailers can create offerings that resonate on a personal level, transcending traditional boundaries.”

Ajello said his firm is currently talking with one retailer about AI personas, “which seamlessly integrate the customer into their creative process. This tool will allow them to generate personas that have an LLM extension. Their team will be able to talk to any given persona about anything they like. Walmart versus Target. Amazon. Toothpaste. Pizza.”

“But most importantly, these personas will be able to extensively describe their bedrooms, closets and shopping routines,” he said.

With that information, the AI can generate various insights. Ajello said the data collected can then feed back into AI system, which will generate reliable bedroom layouts. “Think: dynamically generated medicine cabinets, bathroom closets and pantries based on customer data,” he said. “These AI-generated insights are invaluable for all kinds of things for this retailer, from design process to research.”

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