AI Is Killing Retailers and Giving Life to Mindless Shopping

4 | By Shah Gilani

It’s called artificial intelligence, or AI, when software programs learn to perform complex tasks without human oversight. It’s changing how we shop and the future of retailing.

You already see it working on your computer and mobile devices when ads pop up for things you’re thinking about buying, and you wonder… How did “they” know?

That’s AI working to make your shopping easy and often, if not mindless.

Here’s how AI is influencing your shopping habits, changing the nature of retailing, and killing off some of your favorite stores and brands…

The Robots Are Already Here

Ecommerce, the digital assault on traditional bricks and mortar stores, isn’t just winning battle after battle in the war for shoppers’ attention and spending. It’s changed the battlefield and the weapons being deployed to cut open consumers’ pocketbooks and wallets.

Digital platforms are, as I’ve said before, Trojan Horses. They unleash their AI algorithms on everyone’s computers, laptops, and smart phones. The ecommerce frontier, in the battle for consumer spending, is what makes the application of AI possible.

Every digital retailer, whatever they’re selling (or if they’re trying to sell everything, looking at you, Amazon.Com Inc. (NASDAQ:AMZN)), is employing some form of AI. Or they’re about to, because they have to.

In fact, several recent experiments and announcements underscore the A.I. trend in e-commerce.

Pinterest recently launched Pinterest Lens that, according to Time magazine, is “a Shazam-like service that conducts visual searches based on items in the everyday world.”  The service lets the user take a picture of an item which Lens then helps you find online.

Lens is Pinterest’s next generation innovation based on its Related Pins and Guided Search, which are themselves based on the premise that shoppers may not know what they’re looking for until they see it.

Time quotes Andrew Zhai, an engineer working on Pinterest’s visual search engine, saying, “For shopping specifically, improvements to online discovery means new ways to find products you’re interested in but may not have the words for; visual discovery gives people a way to discover new brands and ways of styling that they never knew existed.”

Gilt, another e-commerce trendsetter, deploys visual search for similar items of clothing with different features like a longer sleeve or a different cut.

Etsy Inc. (NASDAQ:ETSY) uses Blackbird Technologies, which it bought in 2016, to apply image-recognition and natural-language processing to its search functionality.

Basically, AI learns from consumers past behaviors and their searches, as well as trial and error to learn how to present ads and products that stimulate buying.

What the Industry’s Leaders Say About AI

At a panel discussion in May at the Internet Association’s annual gala in Washington D.C., Jeff Bezos, Amazon’s founder and guiding genius said these illuminating words…

“It is a renaissance, it is a golden age, [and] we are solving problems with machine learning and artificial intelligence that were in the realm of science fiction for the last several decades. Natural language understanding, machine vision problems, it really is an amazing renaissance… At Amazon, some of the things we’re doing are superficially obvious, and they’re interesting, and they’re cool. And you should pay attention. I’m thinking of things like Alexa and Echo, our voice assistant, I’m thinking about our autonomous Prime Air delivery drones. Those things use a tremendous amount of machine learning, machine vision systems, natural language understanding and a bunch of other techniques. But those are kind of the showy ones. I would say, a lot of the value that we’re getting from machine learning is actually happening beneath the surface. It is things like improved search results. Improved product recommendations for customers. Improved forecasting for inventory management. Literally hundreds of other things beneath the surface. The most exciting thing that I think we’re working on in machine learning, is that we are determined, through Amazon Web Services – where we have all these customers who are corporations and software developers – to make these advanced techniques accessible to every organization, even if they don’t have the current class of expertise that’s required.”

Bezos’ Amazon is at the forefront of using A.I. and machine learning in digital retailing, but they certainly aren’t the only players in the game.

Google CEO Sundar Pichai gave us some retail insights following Alphabet Inc.’s (NASDAQ:GOOGL) recent earnings release and discussion with financial analysts, gives us a window into Google’s AI retailing push.

Pichai, speaking about AI, said,

“We’ve increased our investment in machine learning in our advertising business with efforts like Smart Bidding, where our systems predict the performance of an ad, and adjust advertisers’ bids in real time to maximize their results… Mobile has transformed the shopping experience. In the past year, local shopping queries have increased by 45% and the number of retailers that provide us with their local inventory feeds has doubled.”

Retailers are partnering with Google as an ad-serving platform and increasingly as a demand-generation and revenue driver. Which means more retailers are sharing more data with Google, which improves AI and machine learning at Google and for retailers.

According to GeekWire, in reply to an analyst question about innovation in retail search for shoppers, Pichai said, “When we see what users are looking for in mobile and how shopping is evolving, it’s an area we’re continuously working on…. So, in some ways we are developing deeper partnerships with retailers around the world.”

So, when you see an ad pop up on your computer or smartphone, you’ll know it’s the work of the AI robots and machine learning bots mining your every digital click.

Are they making shopping mindless? Maybe.

But there’s no maybe about the enormity of their impact on retailing.

AI’s here and now, and it’s the future of retailing. Without it, retailers are going to die off like dinosaurs after the meteor.

The new retail-killer meteors are AI and machine learning. They’re destroying companies and brands every day, and we’re all over the winners… And especially the losers.

We’re not just pointing out the losers, we’re making a ton of money on their implosion.

Next week, I’ll show you exactly how.



4 Responses to AI Is Killing Retailers and Giving Life to Mindless Shopping

  1. Robert Pacione says:

    Sorry Shai but my opinion is simple. Sinced learned that humans are transparent and predictable. Surprise comes with obvious behaviour.

    That is that A.I. has already done the groundwork for this point of control in societies values. Which are so distant from bring seem through the eyes of society.

    Bottom line. We retrieved the information through learning about how the brain functions. Turned it into the internet. Now! The internet controls the motion of human life. Well for those who can afford to keep up with it. Others just catch up later.

  2. jon vonn says:

    The reports of women being kicked out of malls does not help the retailer. Prudes might cheer but when shoppers can not be hassled they will op for the internet.

  3. Paul says:

    Coming from someone with 43 years of experience in technology, that’s why everyone should be running browsers that block as many of those information gathering programs as possible. Mine does. Even on this site. You can’t give away information, allow yourself to be “profiled” and then expect to be private.

  4. ronald goddard says:

    all i can say is ‘wow’. its like shopping asleep. its all done for us. but i like going to the ‘shops’. it is, after all, a social event. i mean, the people i meet to have an actual conversation:-) cheers, ron from oz

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