When Google Cloud recently announced new AI products designed to help companies gain better visibility, make informed decisions, and give consumers a more frictionless and personalized online shopping experience, I was eager to get feedback on how these developments fit into the latest retail tech and marketing trends through the expertise of Acceleration Economy analyst Scott Vaughan. We got together by video for a timely discussion where Scott weighed in on AI’s potential, evolving partner ecosystems, market evolution, and increasing reliance on cloud and data — all of that through a retail lens.
Highlights
01:24 — Commenting on the state of the retail industry, Scott calls it “pretty uneven” as you look across sectors including food, auto, electronics, and fashion. There are increasing signs of a pullback or slowdown — not a screeching halt and also uneven. Food and vacations are flourishing because people are looking for experiences. Data came out on the day of this recording (January 18) indicating retail sales are down about 1.1% month over month. But buyer beware — “never underestimate the U.S. consumer” is the general sentiment.
02:43 — A transformation, heavily based on technology, is underway. You cannot compete at any kind of scale today without using technology and data as the buyer’s gone digital or wants their choices to go online, offline, and through different channels; retailers have had to adapt to that in order to get to any kind of scale and profitability. So technology is alive and well. The unevenness applies to the supply chain. Hopefully, that’s getting more and more predictable about where those gaps are, and that’s in large part due to a lot more use of technology and the use of data.
04:02 — Tom recaps the group of new Google Cloud AI products specifically targeting retail. Their functions include AI-powered browsing for web storefronts; dynamic recommendations and personalized suggestions; and intelligence about the mix of products on a store shelf. Tom asks Scott if he anticipates significant uptake — and impact — when it comes to AI in retail.
04:56 — “Absolutely yes,” Scott says. And the pressure only mounts when you consider the visibility and momentum behind OpenAI and ChatGPT — OpenAI just received a $29 billion valuation, but Scott notes we’re still at an early stage of providing out what AI can actually do in specific retail use cases. Speed, insights, and intelligence are all important. AI’s ability to provide intelligence to both the machines that are doing the work and the intelligent workers or the people on the front line means retailers will have to experiment with it. But you can’t just flip a switch and install AI and think the work’s going to be over. Scott does think it’s going to accelerate because a lot of the large retailers are banking on AI and if you’re going to compete or be a disruptor in the retail space, you’re going to have to compete on that same level.
08:39 — Tom explains how Google’s new shelf-level, AI-driven intelligence has some similar objectives to technology from Wisy, the Cloud Wars Startup of 2022. Wisy, like Google, takes photos of shelves and recommends an optimized mix of belongings on the shelf. Wisy officials noted in a LinkedIn post that Google’s entrance into this market validates their approach. Also, Wisy targets CPG firms and retailers and can operate in an offline mode, without an Internet connection. It’s an example of an innovative startup whose product has been out for a while now, and an industry cloud/cloud heavyweight jumping in.
Editor’s note: in an email follow-up with Wisy founder Min Chen, she differentiated her product as follows: Google Cloud’s “target customers are retailers who are looking to solve an inventory problem. Wisy technology was mainly designed for field employees including sales reps from CPG companies, brokers and agencies, or store associates who want to increase efficiency and gain shelf-level intelligence beyond inventory.” In addition, she said, Google Cloud software requires a connection to Google Cloud for processing, whereas Wisy does not require an Internet connection for AI processing.
09:49 — Scott references evolving retail partners ecosystems. It’s going to be interesting to see who the disruptors are when it comes to cloud platforms and AI — are they going to be complementary or overlapping? That’s going to be bumpy in retail. Ultimately, retailers can benefit because if they integrate retail systems with their own data, first-party data, or third-party data, that’s going to be a big advantage. The whole ecosystem of retail is really interesting as people are moving into other markets. It’s messy and that’s going to be a good thing for the consumer.
11:14 — On the point of retailers moving into other markets, Tom cites Walmart, an aggressive digital innovator that’s moving into industry clouds, developing tech they want to offer to other retailers, and acquiring tech companies too. They’re a really good example of how the retail ecosystem is evolving.
12:31 — Scott developed an analysis recently on retailers’ use of data and the cloud in their marketing. He notes the cloud is being relied on to aggregate and pull all their data into cloud databases. Customer data platforms are running in the cloud, pulling first and third-party data to create complete pictures of the customer. Marketing’s betting that data is going to become the intelligence or the currency so they can grow their business. Then there’s the platform element. We hear so much about Google Cloud, Amazon, and Microsoft, but consider Toast. You go to almost any food retailer and they’re using Toast. Now Toast is being connected to eCommerce and their supply chain. So there’s innovation happening to provide better customer experiences to drive revenue and to grow your customer base.
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