Barcelona, Spain — As rising interest rates and high inflation continue to weigh on consumer sentiment, online retailers gathered at the Barcelona retail conference Shoptalk Europe pinned their hopes on the industry’s newest buzzword, generative AI. was
The conference, held May 9-11, coincides with Google announcing that it is testing artificial intelligence in the search space. He talked about how innovative technology can help tie products together. At the same time, participants expressed concerns about a range of subjects, from data privacy to potential impacts on their work.
“Online retail will face big changes in the next two years,” said Heikki Hardre, co-founder of AI deep tech firm Milos.
Traditional search engines only show a fraction of relevant products, he said. Using the example of his dress search for Dirndl, he explains that the Miros Wordless Search engine helps him find relevant fashion items to his 60 by recognizing browsing patterns that reflect shoppers’ purchase intent. I’ve demonstrated how to display within seconds.
“While I was doing a little scroll here, the AI was running almost a million queries back and forth with me,” he said. “It’s wrong to say that I read people’s minds, but it certainly feels that way.”
While Miros is still in the early stages of its rollout, Haldre believes retailers who quickly introduce generative AI to their platform will have an edge over those who don’t, as consumer spending falters.
“Right now, retailers are faced with difficult decisions. The normal procurement process is long, 9-12 months for large decision makers, but I don’t think they can afford to wait now. Those who are doing so will be rapidly left behind in the competitiveness,” he said.
Robert Gentz of Zalando at Shoptalk Europe.
Offer shop talk
Robert Genz, co-founder and co-CEO of German e-commerce platform Zalando, has predicted that online shopping will change dramatically over the next 15 years.
“Fashion e-commerce is very efficient and very easy, but it’s still not 100 percent fun,” he says. “This is what we have to push to get better, and there is a lot of innovation happening right now at a very fast pace that we want to embrace.”
A major advancement in generative AI is that it enables search engines to understand context, helping consumers find products for specific occasions. Gentz warned that the technology is still immature, but Zalando plans to release the first beta version of his ChatGPT-powered fashion assistant soon on the app and on his web platform.
The e-retailer posted a 0.1% drop in annual sales in 2022 as customers returned to brick-and-mortar stores after the pandemic, slowing growth that had been exhilarating for online players. With this in mind, Zalando focuses on how to inspire and entertain its over 50 million active customers with every digital tool it comes with.
“For example, 3D images can help increase engagement with consumers. We strongly believe that the primary way consumers will interact with us in the future will be through short videos. On the front, there’s a lot going on that actually drives engagement and makes it more fun, Genz said.
“And the advances we are seeing in generative AI, machine learning, and computer vision are actually helping digital players make experiences more relevant, more personal, and ultimately less wasteful. I think it will also help,” he added.
Data is key to generating personalized recommendations.
Zalando’s vice president of size and fit, Stacia Kerr, says customers using the Zalando app on mobile devices can generate their own body measurements by simply taking two photos, one from the front and one from the side. The new feature will be introduced in June, he said. side.
“Then you can use that kind of data in the context of virtual fitting rooms. I haven’t seen it yet,” she said.
The retailer partnered with Puma to test the feature. “What we’ve found from running this pilot is that customers are just thrilled to see how the items fit on their bodies and actually see themselves in our experience. Instead, we are spending more time on this campaign,” she reported.
“Using data to address your customers’ most important questions is more than just transforming transactions. It’s also about helping you get a job,” Carr added.
Having access to huge data sets gives market leaders a competitive advantage.
Google said its new generative AI shopping experience is built on the company’s shopping graph, which has more than 35 billion product listings. “In fact, more than 1.8 billion listings update every hour on the Shopping Graph, giving people fresh, trusted results,” Google’s vice president of search Elizabeth Reid said in a post last week. said.
Lyst CEO Emma McFerrin at Shoptalk Europe.
Offer shop talk
Lyst CEO Emma McFerrin has used clustering, a machine learning technique, to analyze data from her shopping platform’s 200 million users to identify behavioral and preference groups. In particular, Lyst focuses on her VIC for the next generation. This VIC of hers is a knowledgeable and fragmented group with an increasing share of luxury spending.
“There are definitely ultra-luxury customers in the data who don’t want to see fashion sales. They just want to shop elite brands at full price,” she says. “Personalization has always been a big theme of what we do, but now we are going to reach the ultra-ultra-personalization stage. Customer expectations are very high.”
But retailers have to overcome some hurdles. Data privacy has been at the forefront since Italy’s temporary ban on chat GPT, highlighting concerns that new AI applications could violate the European Union’s strict General Data Protection Regulation. It is important to ensure that the
“Where we really focus on personalization is the registered users who are members,” says McFerrin. “We want our customers to agree to get value.”
Others are concerned about the risk of reputational damage if ChatGPT and its upstart contemporaries present harmful misinformation or if automated systems go out of control.
Alex Williams, head of online trading and growth at British retailer Marks & Spencer, explained how the company has developed an internal feature called Bullseye that allows users to tailor their emails to their personal preferences. I talked in detail about how I developed it. He estimates that M&S has 6 billion digital customer interactions each year.
“Changing the operating model was pretty difficult,” he said. “The idea of a model going out of control and the damage it could do to the brand was something that was very concerning for the brand team. I had to move on.” and amend based on that. “
Delegating authority to the technical team also changed the role of the manager in the 139-year-old retailer. “For leaders who aren’t really used to doing it that way, this is pretty scary. In fact, what it frees up is removing what I call the insight loop. This loop is , slows down an organization’s ability to respond,” he said. “It affects customer behavior.”
“Not only will the customer experience be much improved, but it will also give the team greater power and enable them to enjoy their work even more,” Williams argued.
Entrance to the Shoptalk Europe conference in Barcelona.
Offer shop talk
Some question the impact of AI on employment.
“We want to take responsibility for researching AI implementations. We want to make sure that our customers and employees benefit,” said Amazon’s vice president of North American and European Customer Fulfillment and Global Operations Services. said Stefano Perego of
Thanks to the “joint deployment” of AI, Amazon has hired more highly skilled workers in warehousing and logistics, reducing the need for repetitive tasks and reducing workplace accidents, he said. .
“When working on a project in this area, you need to have some basic principles: Am I acting responsibly? Are we innovating in a rigorous process that focuses on very clear requirements? Then we can see how AI can be a force for good across a range of trends.” said Perego.
AI.Fashion, a digital fashion studio that creates photorealistic AI-generated fashion images, claims its technology helps brands reduce costs and waste. But CEO Danielle Citron was mindful of potential criticism following backlash over Levi’s announcement that it would start testing AI-generated clothing models.
“There is some concern that AI will have a pretty big economic impact, not just on fashion and models, and I think that’s justified. I think part of that impact is on the human transition. “That’s what we want,” he said, “so that it doesn’t have a big negative impact.”
The company plans to partner with models to transform their images into digital avatars, ensuring a cut for future use, but could not reveal how much of the database is based on humans. Citron expects the use of AI to spread to all areas of the fashion industry, from design to manufacturing to marketing.
“Our technology has gotten a lot better in the last few months, and I think the pace will continue to accelerate,” he said.
Lancôme virtual store designed by ByondXR.
offered by BeyondXR
AI has proven to be a godsend for ByondXR, which builds virtual and immersive online retail environments for brands such as Shiseido, Lancôme, Estée Lauder and L’Oreal.
“When a client approached us and needed to build a creative concept, we used to have to actually build it from scratch, even at the demo stage. Rendering and creative would take hours. Now we can just write the initial concept or theoretical idea and start getting images and 3D environments,” said Atay Schulberg, Strategic Account Executive. “In that respect, this is a big boost for us.”
Additionally, the company uses AI tools to create ChatGPT-connected conversational avatars that can be embedded on any website. “There’s a lot of customization and personalization going on right now,” Schulberg said.
But with all the talk about innovation, management emphasized that the customer comes first.
“We are proud to have a lot of data from our 160 million members,” says Sarah Schoberg, Head of Marketing and Digital Sales for Southern Europe at Swedish high street giant Hennes & Mauritz. says Mr. “They value convenience, they value simplicity. Then you can make up for it with experience, but you need to establish the basics first.”
He said retailers could get sidetracked in trying to offer the latest technology.
“We can all be creative and come up with fancy solutions, features and technologies, but if we don’t solve our customer’s needs, we’re done. I think I fell into a trap,” she said. “But it’s not really rocket science.
