Cloud and AI seen fueling digital transformation

Discussion
Jan 28, 2019
Tom Ryan

According to the “2019 Retail C-Suite Viewpoint Survey” conducted by Incisiv in collaboration with Microsoft for JDA Software, retail executives are hoping the cloud and artificial intelligence (AI) can guide the merging of online and offline experiences.

The survey of 221 c-level retail executives across multiple continents found respondents seeing the cloud having more than two times the impact on business agility compared to any other technology and is a key driver of the “Intelligent Enterprise” along with AI.

Seventy percent are using the cloud and 92 percent expect to be using the cloud by 2020. The top benefits from the cloud include the ability to adapt quickly to new business needs, 64 percent; faster time-to-market, 57 percent; and reduced cost of ownership (TCO), 53 percent. E-commerce and marketing lead the pack in utilizing cloud adoption while supply chain and store systems lagged.

Meanwhile, AI saw both the highest rate of current experimentation (pilots) and expected future adoption across the c-suite, with respondents planning a five-time increase in AI adoption over the next two years. Only 12 percent were found to be using AI/machine learning (ML) currently.

The top AI use-cases were seen as boosting promotional performance, 50 percent; sharpening inventory levels; also 50 percent; enhancing labor scheduling; 39 percent; personalizing product recommendations, 36 percent; advancing demand forecasting, 35 percent; and improving product assortment, 29 percent.

Both the AI and cloud are expected to help combat many of retail’s challenges relating to gaining a single or real-time view of inventory, integrating data from multiple sources and improving trust in data.

In a blog entry, ShiSh Shridhar, Microsoft’s global retail strategy director, said the explosion of data has enabled retailers to combine sales data with data sets that include demographics, weather, economic indicators, social media and more “to quickly determine the impact of external influencers on specific categories, SKUs and stores.”

He added, “The emergence of IoT and the resulting data has been another force that has enabled enhanced visibility about customer behavior and preferences. All this data forms the essential fuel for AI/ML.”

DISCUSSION QUESTIONS: Do you see AI and the cloud solving many of retail’s challenges around inventory visibility, unified commerce and underutilization of data? Where do you see the biggest near-term versus long-term benefits of the technologies?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Cloud and AI hand-in-hand have a lot of potential for retail."
"Cloud computing is the equivalent of trading in the old sedan for a Ferrari. An equivalency most will understand."
"I’ve been talking about the benefits of utilizing multiple data sources since I had a full head of hair."

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11 Comments on "Cloud and AI seen fueling digital transformation"


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Dr. Stephen Needel
BrainTrust

Believing the cloud and/or AI will solve these problems is like believing that going to church would do the same. The problems with inventory visibility, unified commerce, and data utilization are not computer problems, they are people problems. You need more and better people to solve them, not more computing power, some vague process called AI, or a belief in a supreme being.

Nikki Baird
BrainTrust
I see still some retailers who see cloud as “nice to have” or feel that the subscription cost is “too high” vs. what they can wring out of a license/maintenance deal where they sit on the software for five years before investing again. I think what these companies are missing is that the pace of the consumer has become so fast, that not being in the cloud with your technology solutions, and not making the commitment to keeping up with the latest updates/upgrades is taking an enormous risk around your company’s ability to keep up. I do think it’s interesting to encounter companies who are anti-cloud, but very pro-AI. You can’t have AI without the cloud – the computing power alone would kill any AI project, let alone the development costs of trying to do it all yourself. AI is possible *because* of the cloud. So, yes, I see cloud and AI solving problems that retailers have today. Cloud delivers immediate benefits, and AI, longer-term. From what I’ve seen, we’ll have to go through some… Read more »
Zel Bianco
BrainTrust
I’ve been talking about the benefits of utilizing multiple data sources since I had a full head of hair. Multiple data sources that include not only syndicated and POS data, but demographic and other internal data sets help to tell a much more insightful story that hopefully leads to actionable recommendations. As was stated by Microsoft’s Global Retail Strategy Director, “the explosion of data has enabled retailers to combine sales data with data sets that include demographics, weather, economic indicators, social media and more “to quickly determine the impact of external influencers on specific categories, SKUs and stores.” Many companies have access to this data but have not been willing to do what it takes to bring them together. We have found that the ones that do, whether internally or with our help, reap the rewards. AI and the cloud will most definitely go a long way to streamlining this process, but it will most definitely not have an “Easy Button.” It will still take planning and a push from senior leadership to drive it… Read more »
Harley Feldman
BrainTrust

Cloud computing provides a centralized repository of retail data — an ideal place to integrate in-store and online data. In addition, with Microsoft, Amazon, IBM and others offering cloud computing where the cost of development and support is shared with all of the users sharply reduces the development and support costs for individual retailers. Cloud computing offerings can be scaled to fit the computing and storage needs of each retailer reducing the cost risk that is needed at various stages of retailer growth.

The near-time advantages provide a quicker path to getting up and running as cloud computing services already exist and the costs can be scalable to the size of the business. In the long term, data collection about sales and inventories will be standardized allowing for new and innovative AI and other analytics about how the business is doing, which products are selling best and the path toward maximizing revenue and profits.

David Weinand
BrainTrust

It’s well documented that retailers are having a big challenge in finding good technical people to maintain systems – yet as Nikki pointed out, there is still reticence on the part of many retailers to adopt cloud based delivery of software and systems. Being able to leverage the expertise of providers around data utilization or unified commerce via a services model in the cloud I see as a win-win. Dr. Needel is right in saying it is a people problem but Cloud and AI can address some (not all) of those problems.

Ralph Jacobson
BrainTrust

I think a retail business starts with effective inventory management. Those retailers that secure real-time inventory visibility, augmented by AI are the ones that will achieve the promise of seamless shopping experiences.

Cynthia Holcomb
BrainTrust

Cloud and/or hybrid cloud computing affords cost savings leveraging IoT. Edge computing can combine cloud resources from various vendors to enabling “expert” AI-enabled intelligent systems to create countless, customized retail solutions, from supply chain to querying for individual customer preference intelligence. Big Data stockpiled in individual retail silos unleashed! Companies like Microsoft Cognitive Services, Google AI, and Watson are each in the business of democratizing AI for all. Each has platforms, requiring no coding experience, designed to enable anyone to try their hand at building customized business solutions. An opportunity for the C-suite to test-drive AI. As individual retailers process “getting” AI enhanced cloud computing, the rest of the digital world has already passed them by. Cloud computing is the equivalent of trading in the old sedan for a Ferrari. An equivalency most will understand.

Oliver Guy
Guest

I don’t think cloud and AI on their own are able to solve the challenges around inventory visibility, enabling unified commerce and helping data to be better utilized. The first thing that needs to happen is data silos must be eliminated. Connecting across the different silos to provide a consistent view is where cloud may act as the “delivery mechanism” and AI might help add additional value — however, this delivery mechanism is less important than the outcome.

Doing this for inventory can solve the inventory visibility issues; doing it for all data can address underutilization.

Beyond that, orchestration across the data and logic silos fundamental to the delivery of unified commerce.

Ken Morris
BrainTrust
It is great to see that retailers are realizing the value of moving applications to the cloud and leveraging AI to make smarter decision. While these are not silver bullets, they are definitely the right tools to help fix inventory and unified commerce problems. From a cloud perspective, the greatest benefits are enabling real-time retail, creating an agile IT environment, accelerating the time to implement new capabilities and reducing ongoing maintenance efforts and costs. The reality is that cost containment is a big part of retail success and the biggest costs retailers deal with are around people, inventory and the stores. By leveraging the cloud and AI, retailers can reduce the spend around all three of these critical success factors. The cloud and AI can reduce headcount while improving customer service by leveraging real time data about what is in your closet or pantry and enabling customer or associate facing up-sell or cross-sell technology. In a real-time retail scenario, retailers can reduce inventory spend by eliminating safety stock and updating all inventory from all channels… Read more »
Ricardo Belmar
BrainTrust
Like many technology solutions being thrown at retailers today, cloud and AI alone are not going to solve all of their problems. Are both important? Yes, both have and will continue to have a role to play in modernizing the way retailers process data and by extension, engage customers. However, as others have pointed out here, let’s not forget the people part of the equation! That said, the cloud is already bringing value to retailers today. We see this with many of our customers who have increased the speed at which they deploy new applications to the store and therefore react to customer expectations thanks to the cloud. However, retailers also need to realize that their network infrastructure to the store needs to be upgraded to handle increased capacity as well as the higher transaction loads modern applications demand. Networks designed for past generations of apps cannot handle this and many retailers learn this the hard way after a deployment! AI is just beginning to demonstrate value, initially behind the scenes in supply chain optimization… Read more »
Kenneth Leung
BrainTrust

Technology is part of the solution, but simply because you know something doesn’t mean you can do something about it. In areas where you can automate the execution as well as decision, such as e-commerce and route optimization, technology is going to have a bigger near term impact than let’s say in-person customer service.

wpDiscuz
Braintrust
"Cloud and AI hand-in-hand have a lot of potential for retail."
"Cloud computing is the equivalent of trading in the old sedan for a Ferrari. An equivalency most will understand."
"I’ve been talking about the benefits of utilizing multiple data sources since I had a full head of hair."

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