Episode 6: In the new AI-driven landscape, here’s where opportunities lie for retailers

In this episode of Retail Untangled,  Amie sits down with Karlie Taylor, marketing manager of unified commerce platform Shopline, to discuss the opportunities for retailers within the AI-driven landscape

Transcript

Intro:

Coming up on this episode of Retail Untangled.

We don’t want to over order, we don’t want to under order. Being able to forecast based on trends, based on seasonality, based on what’s happening in the world. Using all those data points to create something unique and personalised. If the data is bad, you’re not going to get the cut-through.

Amie:

Welcome to Retail Untangled. My name is Amie Larter, and this is the podcast where we speak to retail industry experts and find out business hacks that have helped them succeed. You won't find these gems anywhere else. And we have some superb stories from the coalface as well as helicopter insights from retail industry leaders.

It feels like 2023 is the year when AI has gone from being just a concept to a real tangible thing. Before 2020, talking about AI was all about those articles predicting the future of tech, and only a handful of trail blazers were out there trying out its applications. But in the last couple of years, there's been a serious influx of cash into AI startups, and that's led to it getting picked up more and more in everyday situations over the last year. 

Retail is predicted to be one of, if not the biggest industry investor in AI tech. And today, Karlie Taylor, marketing manager at the unified commerce platform Shopline, who's been in the marketing and e-commerce industry for many years, is here to let us know how she's seen this timeline unfold. Amidst all the excitement, the question arises, where do the true opportunities for retailers lie in this AI-driven landscape?

Karlie:

In a nutshell, it's about personalisation, which is what marketing and advertising have always been about. How can we personalise better? How can we get our messages read and responded to? AI is really going to help that, especially in the retail sense, hopefully leading to more conversions and higher average order value. It's here now. We're all using it. ChatGPT has been around for a little while now. It's in most of the content management systems. I use it every day in HubSpot. So it's great for being able to save time and get rid of all the tasks that you don't want to do. 

From a holistic point of view, it's the differentiated one-to-one experiences, which we've been talking about for so long. And it's just the technology driving that really. And that's where retail is really going to see the benefits. They're going to enable the retailers to understand their customers better and give them better customer experiences. And it's about bringing the data, which again we've been talking about for so long, and the technology is here and now to bring the data together to create these hyper-personalised experiences. 

Amie:

It really feels like in 2023, we've moved from talking about AI to very much being among it; we're using it in one way or another. And I think probably there are a few different types of people. There are people who have been your trail blazers, someone who's kind of adopted the technology a couple of years ago, been trying it; you've got your larger organisations that are fully implementing strategies to use AI. And then you've got people that are just testing the waters, so to speak now, but it's very much mainstream from a practical application perspective, what have you observed from brands who are using it well, and what are the use cases?

Karlie:

Interestingly, a lot of Australian retailers have not embraced this technology. I think they're a little bit scared, looking to see what other markets are doing. A good example is The Iconic, who have always been at the forefront of technology. I don't know if you remember they had the app, and you could try on your shoes, the augmented reality. They've always been so amazing with their technology. So it's not surprising that they have embraced AI. The personalisation engine that they have is amazing, the ability to search through the products and be served up with the products that you're actually looking for is amazing. So really loving what The Iconic is doing. 

Fit Finder is another brand that I've come across. Again, it's leveraging the data. So not only leveraging the data in their databases for the size of your clothes, but they also look at returns. Why are you returning? Is it too big, too small, too this, too that? And updating their data in real time to be able to give a better customer experience to their customers and the end customers who's the purchaser. As a consumer myself, I don't want to order something, have it come to me, and I'm all ready to wear it on Saturday night and it's too small, too big, too long, too short. So having the product like Fit Finder that uses AI, generative AI constantly learning and using the data to learn, it's going to be an amazing customer experience. 

Amie:

Are there any other applications from a backend perspective that you see rate the potential for retail, whether it be inventory management or whatever it might be?

Karlie:

Definitely inventory management. It comes down to the data, using the data. Inventory management is a great one. Forecasting is a great one. We don't want to overorder. We don't want to under order, being able to forecast based on trends, based on seasonality, based on what's happening in the world. Advertising is a huge one for retailers. They spend millions of dollars a year on advertising on the platforms. Meta and Google have both introduced it into the advertising platforms. They want to see the retailers succeed. They want to see the conversions go up, because then the retailers are going to spend more money on their advertising platforms. So seeing what they're doing in the spaces is really cool and really helping the retailers get the cut through. Advertise to the right people at the right time with the right product. So hopefully, they can get that conversion.

Amie:

Recently, the CEO of WPP, one of the world's largest advertising agencies, highlighted their collaboration with major brands like Nestle, Mondelez in utilising generative AI for advertising campaigns. So rather than, as an example, flying a film crew down to Africa to shoot a commercial, they've created that virtually. Can you elaborate on the potential cost savings and efficiency gains associated with this approach, especially when compared to conventional methods like sending film crews for commercial shoots? 

Karlie:

Firstly, it's important to point out that the cost saving is the people cost, right? So we're talking about livelihoods. It's not something that should be taken lightly. We're talking about hundreds of thousands of people, you know, copywriters, artists, everything, that we are taking out of the equation. There is a place for it. However-definitely, it's going to help with efficiency gains, a hundred percent. I know in my day-to-day life, being a very busy marketer, being able to use a Chat GPT to help me write copy, write blogs, SEO, any of those mundane tasks, if that can take it off my plate, that's great. 

On the flip side though, otherwise, I would have hired a copywriter. So there goes that contract that is no longer there. It's funny; I was chatting to my boss about this today, and he said the only people that are going to lose out in this are the people that don't embrace AI as a productivity tool. Which is interesting because we all jumped to the conclusion that everyone's going to lose their jobs. There's no work for creatives anymore because AI is going to take over it. It's actually not; it's the productivity costs. And this is where the efficiency gains come in. 

I know when I'm starting to write a blog post or an SEO page, I put bullet points straight into Chat GPT and it spits out something that I can work from. It's not the be-all-and-end-all I still need to put in the time to get it done, but it does help with that productivity. Getting it started, getting it underway, it still needs human refinement, absolutely, the human experience in there as well. But it’s the productivity tool, one hundred percent, where the gains are going to be.

Amie:

I agree, and I think, being a media organisation, right? So, there's a lot of discussion around the creativity side of things. 

I can't help but think, you can use it to help create an idea. You can use it to potentially boost your research. You can use it to come up with things that you might not necessarily have thought of. But you're not using AI to write the copy if you're going to be a brand or if you're going to be, like us, a media outlet that sort of wants to be at the forefront of news, it’s not going to do the interview with a CEO. It's not going to replace our conversation now. It's more so it might be the driver of some of the ideas or questions behind it. 

And I think, you're right when you say productivity, it's sort of helping you become smarter. It's helping you become quicker and more efficient. And in that way, it can lead to us having a better conversation, but the conversation still exists. So I think it's an interesting one. You mentioned the cost and the people and the resource cost. I'm keen to understand from your perspective, when you have got something like AI, and AI is being used from, let's say a marketing perspective to generate copy, and you've got every single brand and retailer using that to generate copy. It does or could tend to lead to more of a uniform approach to the types of content that goes out into the world, and us being in the marketing space, we know cut through is so important. So you need that unique point of difference. 

What is the situation there? How do you use a tool like this to generate a unique voice? 

Karlie:

I think you can tell now what's been generated by ChatGPT. I think it's very easy to spot AI images as well. When I was recently hiring, I set a task to write a social media plan. And some of the ones I got back, I'm like, 'Oh my God, did you just throw this straight into ChatGPT?' It comes down to data. Again, we're going back to this data hyper-personalisation and being different. It's a retailer using their uniqueness, their unique product, their unique brand voice to deal with their unique audience and really be different from everyone else in the market.

But you can't be that unless you have your data. So you need your data from your website hits, how people are interacting with your blog posts, your social media interactions, your emails, and all of that gets filtered through to create unique copy, unique this, unique that, to get the cut through to your unique audience. Because who one retailer is targeting, another retailer is not, or they may be targeting the same people, but with different messages, with different products, different messages. And it's that cut through with the data that you need to aim for.

Amie:

From your perspective, you mentioned that you think not a lot of retailers in Australia are using this yet. What is the roadblock? Is it mindset? Is it actual implementation from a business perspective? 

Karlie:

Again, it comes down to data, and I see a lot of big retailers that have these big monolithic systems that cannot integrate the different data points. No matter what they do, they cannot get the data with one single source of truth. They cannot bring it together to be able to use it. I’ve seen it all the time in my various roles in the last 10 years I've had in this industry.

Then I see some of the smaller upcoming retailers who have access to not-so-sophisticated technology. But they're doing it really well, because they might not have hundreds of millions of followers, but they do have a smaller subset of customers and they know everything about them because everything is linked to their one system. So they might only be talking to 20,000 customers, but they know how to speak to those 20,000 customers. They know each customer, what's on their wishlist, what they want, what they aspire to be. So they can then serve them up with very unique messages using these data points.

Amie:

You have mentioned a couple of times now, it's all about the data. Do you think from an 'it's all about the data' perspective, you get out what you put in? 

Karlie:

The old analogy of the CRM, right? Rubbish in, rubbish out. 

Amie:

Rubbish in, rubbish out. That's perfect. And I think that's probably going to be the case for this type of concept? 

Karlie:

Absolutely. Data, data, data, all the way, data that speaks to each other and one single point of truth for that data. So that you are getting the interactions, you know what they're looking at in social, you know what they're interacting with on your website, and using all those data points to create something unique and personalised. If the data is bad, you're not going to get the cut through. For example, if you are targeting me with a product for a retiree, that's not me, that's not going to happen. If you're targeting me with something for children aged five to 10, absolutely going to get cut through, and I'm highly likely going to purchase that product.It comes down to the data

Amie:

How retailers can effectively compete with companies, I think like Shein is a really good example, which can generate thousands of products using tools like DALI and produce items on demand if they gain traction. So, you've got some of these really big companies that, with the ability to generate a lot of pages, potentially reviews, whatever it might be, a lot of content and have the really the money to be able to do that. And then, produce, how do people compete in this type of world?

Karlie:

I think retailers need to ask themselves if they want to compete with the likes of Shein.

They are contributing to textile waste, sustainability issues. We don't want to overproduce; I don't think they're a good role model for everyone else. That said, their technology is amazing. How they're using the technology, it's not great for the earth, but they are using Google Trends to see what people are looking for. Then they're sticking it up on their website and seeing what's getting cut through. What are people actually buying? What are they spending time looking at the site, and then they go to production. And that's something retailers can do now. It's not proprietary technology to share, and they're just using the technology.

Amie:

In terms of the sustainability benefits, because, you know, as people become more efficient, we can be smarter, right? If you can be smarter, you can really pinpoint how AI could end up being of benefit to not just retailers but also the ecosystem and sustainability?

Karlie:

So it plays a huge part because we're using the data points to be more sustainable by accurately predicting what we need, what we need to produce, what's going to be on trend next season, what's going to be on trend this following season, and then how many do we actually need to produce? The data points are telling us we need to produce a hundred thousand units. Let's not go and produce a million units because we're only going to sell a hundred thousand units. So all that extra waste is lost effectively with AI because we're only producing what we need and what the data is telling us that we need. So it definitely plays a huge part in sustainability in retail. That's the real value of AI.

Amie:

For retailers in Australia that are not using this properly yet and want to get a foot in the door, and it might be a different case for larger organisations versus something that's a little bit more nimble. Where would you suggest that starting point should be? 

Karlie:

It comes down to communication because this type of technology rollout is affecting the entire business. So we're looking at your supply chains, we're looking at your customer journey, we're looking at the product journey. And you need alignment across all these various bits of the organisation. Now, in a larger organisation, this could be whole teams. In smaller organisations, it might be one, two, three, four people, which makes it a little bit easier. But it's the communication, everyone is on the same page; this is what we're going to do because you need to work together to make this happen. It's about looking at your data. Again, it comes back to the data. Who holds your data? Where is this data coming from? Are you in different systems? Is your email marketing platform linked to your e-commerce platform? Is your social media data filtering in from somewhere? Bringing all this data together is the very tip of the iceberg, and making it speak with each other. And then being able to use that data is where it gets started.

Amie:

Not an easy task for someone that's not doing it yet, though, right? 

Karlie:

Absolutely not. Smaller companies, it's easier because you're talking about less data, fewer data points, but you've got to start somewhere. Even if you start with looking at your buyer journey and making that as seamless as possible, one-click checkout, have everything pre-filled on the checkout, understanding your customers' sizing, understanding that they are looking for women's clothes or children's clothes or men's clothes. Start simple with personalisation, which a lot of retailers are doing. Personalisation has been around forever. The AI tools are just making it on steroids really and really helping retailers hyper-personalise to hopefully get those conversions, 

Amie:

which is good because it's sort of what a consumer expects now, right?

Karlie:

100%.

Amie:

 And what do you think the risk is for a retailer if they don't start to think about embracing this type of technology? 

Karlie:

They'll be left behind. Definitely. Looking at the consumers, and like you rightly pointed out, consumers just expect it now. You do have the likes of overseas brands here now, and they're doing it really well. We see that ASOS is amazing. The website's amazing. The personalization is amazing. The Aussie brands need to keep up. They need to ensure that they have the data there and they're personalising the customer experience because customers have so much choice these days. If they don't like what you are selling them, they can go to someone else. And chances are it's a similar product at a similar price point. And it just comes down to the service they receive and the brand loyalty, especially for the Australian brands, which are finding it tough. Australians are loyal to Australian brands; we just need to help them stay loyal. 

Amie:

Yeah, you sort of need to meet them where they're at, rather than expecting them to come to you, and you need to meet them with the right thing. I think this type of technology makes that significantly easier. And when we say customers expect it, there's so much noise out there that I think we become a little bit offended if people are targeting us with the wrong kind of product or whatever it is. It's almost got to that point where it's frowned upon to be pushing something to someone that they're not really interested in. 

Karlie:

And what happens? The consumer unsubscribes, and you have lost them. Because it's very hard to get them back if you're not reaching them through their inbox or social media, and they've opted out of your emails. They've unfollowed you because you're just annoying them. How are you ever gonna get them back? 

Amie:

Yeah, it's so so true. So you're in a retailer; you feel like the only place to push forward is to adapt this type of technology, or at least dip the toes in the water. Who in the business do you need buy in from? Because you did say, you know, it might be just a few people for a smaller business or, a bigger business, you're probably going to need management leadership buy-in who in the business. Do you think you need buy-in from if you really want to kind of start to push this?

Karlie:

It's across the entire business. everything from your supply chain to marketing people to operations people, because it comes down to the data. So where that data is coming from, you need all these different people in alignment to say, here's the data, here's how it's going to go. Here's how we're going to transform it. So it can speak to each other. It's a big job, but you definitely need buy in from. All parts of the business and everyone working together to make it happen. Yes, management can push down and make it happen, but it's the people doing their day jobs who need to make it happen and work together to get it happening.

Amie:

That's probably a hard part for retailers right now, because you do have people that want the business to succeed, to grow, to be able to compete. And then you do see some others that kind of see this as- it's not predatory, but it's kind of like, I don't want to implement that, It might take my job. And what would you say to people that are thinking in that mindset?

Karlie:

It comes down to, it's going to be an efficiency saver. It's going to help. It is a productivity tool. It will take jobs, 100%. It's going to, it's, it's happening. I can't tell you the amount of copywriters I've spoken to who are struggling right now, and we need to be mindful of that. At the end of the day, it comes down to... AI is a productivity tool, it's a data tool, it's a personalisation tool, and that's what we need to use it for. There is still the human element. It gets started and the human element comes in because you can't replace that.

Amie:

Yeah. 

Karlie:

Not yet anyway. 

Amie:

Not yet anyway. Where it does build in efficiencies, it does also open opportunity, right? 

Karlie:

So, you need to be a successful retailer, a sustainable retailer, otherwise you don't have a business. So you are creating these operational efficiencies that then you can spend time elsewhere in the business. For me in my day to day job, I can then get Chat GPT to help me get started with some tasks, get rid of all those, and then go work on strategy and where else can we find more buyers and how can we make this better and how can we make improvements. 

Amie:

So you'd say it's really supported your role?

Karlie:

With Shopline, we are acting like a startup at the moment, because we're new here. So, I am doing everything. I am a marketer in a team of one, with a very, very big task. So for me to be able to get some of those mundane,  easy tasks that don't need a lot of brainpower done. I can then focus on the strategy, the analytics, talking to you today.

All the fun things, all the good things, all the things that need you to be a human to do. That said, I don't just get Chat GPT to write my social posts. I get it to write something and then I go in and edit it. It sounds more human, it's more on brand, it's something that you would expect a human to write.

Amie:

And I think that's important when you, when we do have a lot of the content being, whether the original concept is made there, that we have our voice and our brand applied because otherwise we will get this uniformed approach and no one wants that because you're not going to cut through with that.

That's where your opportunity arises from, whilst you might not come up with the original text, you bring your own brand voice to it. 

Karlie:

A brand voice is so important to retailers today because a lot of the products are similar. They are selling similar stuff. And having that real identity is what makes consumers love you. I know some of my brands I just love because of who they are. They produce great products. I could probably get a similar product somewhere else for cheaper, but I'm in love with the brand. I'm in love with the brand story.

I'm in love with the brand message and their brand voice, and that's what you want. Consumers that engage with your brand and love your brand. 

Amie:

Interesting, because there's probably an opportunity there just from what we've spoken about in terms of efficiency where you're not sitting there necessarily writing ad copy for an ad, you could be building up the brand voice and bringing a lot more strategy to that as well, which is kind of the interesting part of this.

So from a shop line perspective, cause I know you guys are relatively new in Australia, however, you've got a massive presence in Asia. Tell me, how are you integrating AI? What are you saying there? 

Karlie:

So being out of Asia, we have been on the forefront of AI for years and we have lots of AI within the platform already, which is fantastic to help the retailers really streamline their operations and just find those efficiency gains. So everything from writing SEO pages, helping with your product descriptions, all that basic stuff.

Where we are different is that, the technology we have is things like product categorisation, product tagging, it's the data side of things, which is really strong for us. So helping products get found with their product SEO, which comes down to product tagging, product optimisation, product categorisation. And that's where we really excel. 

Amie:

Excellent. And any upcoming features we should keep our eyes out for?

Karlie:

We've actually got some really exciting AI stuff coming out. Can't talk too much about it, but it's going to make it easier for new brands to start up. A couple of clicks and you've got a website, you've got a brand, you've got everything there. It's very exciting and the automation, just next level automation to make everyone's lives easier, help with conversions.

We have a very good relationship with Meta. We have used their latest APIs, and integrating that data, online and offline data, is very exciting. I've spoken to a few retailers who are super keen to hear about our offline conversion API, which is kind of new and exciting. 

Amie

From an  AI perspective, anything else you want to add?

Karlie:

The robots aren't going to take our jobs yet, they're not taking over the world yet. It's a productivity tool.

It's something that we should embrace. It's something that we should definitely be a little bit wary of and remember people's jobs are at stake really, but using it as a productivity tool, not getting rid of all the people yet, using it as to the best of your ability to really find that personalisation using the data, to find that personalisation and get your conversions across the line.

Amie:

And when it comes to AI and the future, because, you know, in 2020 we were talking about AI and thinking, you know, it's just so many years away. And now we're at the point where pretty much everyone's using it. If you're not- you should be. What do you see five years from now? Because if we look at what we're reading now, you can either be in the “it's going to be the end of the world” department or, you know,   no one's going to have jobs. What do you see? 

Karlie:

It's like the milkman, everyone thought that job was taken over by supermarkets. All of a sudden you didn't need milkmen anymore. But it just, you know, they had to reskill, they had to change what they were doing. and it's the evolution, there's lots of jobs that have come and gone and every single job evolves over time. All the people who are scared, it's about embracing it. How can you use it to better serve you and your role? How can you be nimble and adapt to the changing landscape? 

It's not going to take all the jobs, it's not, um, but we just need to use it to, to help us be better humans, help us be better business people help us with our lives in general.

Amie:

Better decisions, you know, be more sustainable. 

Karlie:

Exactly. It's using the data to help us, as a society, as human beings, there's a lot of data points we can use, retail aside, from our everyday lives to help us be better, help us find solutions to the problems  of the world.

Amie:

You can't know everything. And so, I think it is quite powerful in that sense. 

Karlie:

It is, but ChatGPT doesn't know everything as well. The spreading of misinformation, like that's going to be a massive issue as well.

Amie:

But that does bring up a good point, a lot of people also rely on it being accurate, which is not. Which is why from a media perspective, you'd never have it creating the content, in our case, and you'll always need someone there to proofread. Do you think that will become a big problem?

Karlie:

I mean, it's the same as websites, right? You take everything you read online with a grain of salt.

Amie:

Yeah. 

Karlie:

That's what we want. Well, our generation has always known that. The next generation, probably not so much. It's on Twitter, so it must be real. And it's exactly the same, just because it spits out something doesn't mean it's true. I see there's a lot of room for misinformation to be plugged in there and then spread back out again.

That's going to happen I imagine in the future, unless it's tightly held down. But it's something that we should embrace, but be wary of.

Amie:

 Be wary and potentially have policies in place because if you don't, then potentially you just become part of that. But if you as a business don't have policies in place in terms of, okay, well, we're not just going to plug in and spit out a huge amount of content. It's got to go through a sense check of some sort. But, yeah, I think the policies in place will become quite important in terms of rollout within retail businesses, but businesses more broadly.

A big thanks to Karlie from Shopline. If you've enjoyed today's episode, make sure you subscribe using your favourite podcast app, and don't forget to rate and review the podcast.

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