Artificial intelligence is transforming retail and e-commerce operations by improving personalized customer experiences, website search, marketing, customer service, supply chain optimization and inventory management.
According to data collected by Statista, the global retail AI market continues to grow, with a compound annual growth rate (CAGR) increasing from nearly $ 4.84 billion in 2021 to an estimated $31.18 billion in 2028.
At DES (Digital Entreprise Show) 2024 in Malaga, representatives from this industry discussed how AI is impacting retail and what to expect in the coming years.
Víctor del Pozo, COO of the Veepee Group, explained how the company, formerly known as Privalia, is using AI in various ways. The first application allows them to personalize each customer's experience. "We have four million visitors a day looking for offers and we use all their data to personalize the offers. No two visits are the same. Every page opened is different," he reveals.
Secondly, Veepee uses artificial intelligence for forecasting. Before the sale, they can predict performance and create operational plans. "We can predict the number of orders, how many hours the products will be in stock, etc.," explains the COO.
With this data, the company can "very easily" predict the development of a campaign and even know whether it should be extended or shortened. They can also assess price elasticity, which leads to higher conversion rates.
The third way Veepee uses AI is in the visual area. "We work with 7,000 brands. We take their images and use artificial intelligence to classify them automatically," explains del Pozo.
The COO admits that Veepee is one of the early adopters of generative AI and has developed its own ChatGPT in collaboration with Microsoft. He claims that all data interacts with their GPT, which they use as "an extension of human capabilities"
Del Pozo explained that they use GenAI to automatically translate all articles and product pages. In addition, 70% of the 2,500 banners are generated using this technology.
Easy to use, difficult to implement
Gonzalo Illesca, COO of Fixy, explained that implementing AI can be "a complicated process" In his opinion, "the main problem is people, the company culture" He advised against being influenced by trends and suggested that companies should consider their actual needs.
"Seven years ago, data was the trending topic. Today it's the same with AI. Companies need to stop and think about what they need and focus less on the technology itself and more on its purpose," he emphasizes.
César Tello, Vice Chairman of Confianza Online and CEO of Adigital, also took part in the round table. This association represents many companies in the digital sector. It provides a seal of approval for transparent and responsible e-commerce.
Tello talked about how his partner Alibaba uses AI to set dynamic online prices that vary in physical stores.
The Adigital boss recommended using AI in small projects and running a pilot project first. "That way you can monitor and analyze progress. If you do not get it right, AI will only amplify your mistakes," he warned.
The COO of Veepee gave similar advice and recommended starting with a small pilot project. "Contrary to popular belief, AI is quite simple at first. You need to train the models. When you are ready, start automating, but not before. Another tip is to listen to customers' concerns," he concluded.
Impact of regulation
In terms of AI legislation, del Pozo pointed out the challenges of complying with regulations when operating in different regions. "Europe is leading the way in terms of laws, Latin America might follow, and China is more lenient," he noted.
He also warned against companies outsourcing AI development, as these providers could use unethical or biased algorithms.
Del Pozo recommends that the CIO, not the CTO, lead the implementation of AI in organizations. He also advises not to disclose company or customer data.
For Tello, "it all depends on the markets. There is a certain amount of technophobia in the media, but we are a long way from Terminator scenarios. Customers will appreciate the use of algorithms to save costs and protect the environment, for example."
Fixy's COO also mentioned that customers may not be interested in the technology and instead focus on other factors.
"Customers do not buy for the technology, they buy for the value proposition. This should be implemented calmly," he argued.
In conclusion, the COO of the Veepee Group advised retail and e-commerce companies to focus on their business as AI is "just a tool"
