It wasn’t too long ago when the news of a computer beating a human at a traditional board game spread across the artificial intelligence community like wildfire. By mimicking the human brain, a computer successfully won against a professional at Go, an ancient eastern board game some AI researchers considered incredibly "computationally demanding." The thought of a computer beating a human expert at this game didn't even exist a little over a decade ago!
You’ve most likely heard of such a machine.
If not, I’m sure the terms “artificial intelligence” or “machine learning” probably appear on your news feed exponentially more so today than ever before.
While we may have wrapped our head around the idea that a computer is probably better at board games than we are—which was a pretty amazing feat—do we really understand the impact of this technology on our current business environment?
There's no denying the influence of AI exists. According to a recent report by MIT, the consensus among most organizations is this:
AI is expected to result in a competitive advantage for most businesses within the next five years.
Interestingly enough, while almost 85% of 3,000 executives polled believe AI will allow their companies to obtain or sustain a competitive advantage, less than 39% of all companies actually have an AI strategy in place.
The same is true for retail.
According to Gartner's 2017 CIO Agenda: A Retail Perspective and Algorithmic Retailing: Using AI to Drive Smart Automation reports:
“Advanced analytics is the technology most retailers (88%) believe will change their organizations over the next five years.”
“By 2020, retailers will use artificial intelligence (AI) to hone the accuracy of and accelerate human decision-making well beyond current levels.”
So it seems like, for the most part, everyone understands that AI is going to influence their organization—whether it’s to their advantage or not. Based on MIT’s findings, there's clearly a gap between the consensus on the impact of AI and the actual implementation of this technology:
“Despite high expectations, business adoption of AI is at a very early stage: There is a disparity between expectation and action. Although four in five executives agree that AI is a strategic opportunity for their organization, only about one in four has incorporated AI in some offerings or processes. Only one in 20 has extensively incorporated AI in their offerings or processes.”
So what gives?
The survey provides some insights on a few potential reasons for this disparity:
- The adoption of AI is seen as an opportunity AND a risk.
- It’s a huge organizational commitment.
- Sometimes there are competing investment priorities in place.
- There aren’t enough clear business cases with AI implementation.
- There’s a misunderstanding between the data and AI algorithm love affair.
- Data privacy and regulatory rules are sometimes a concern.
- Major managerial challenges are inevitable when it comes to introducing AI.
While these potential barriers to adoption hold significant weight, about 56% of U.S. retail and consumer goods CEOs surveyed in a 2017 report stated AI and machine learning would be one of the most significant areas for tech investments. On top of this, about two-thirds agree that technological innovation is likely to weaken or eliminate some of the most traditional players in the industry.
That being said, retail is one among many industries feeling the impact of AI technology. Retailers using such technology are way ahead of the curve, and companies like Burberry already recognize the positive implications such innovation is having thus far:
“After proving the concept of a tech-led, luxury fashion and retail enterprise, with personalization and direct marketing initiatives, Burberry has spoken about its plans to roll out AI tech into other areas of its operations, including production and product development..”
And there’s more to come. Burberry’s senior VP of IT stated:
“We are formulating our AI strategy now … we believe that AI can deliver business value through making better products, faster, cheaper processes and more insightful analysis.”
What this tells us is that AI is top-of-mind for most CEOs.
If it's not, well, quite frankly, it should be.
Another takeaway is that most businesses don't actually have an AI plan in place. Take advantage of this little tidbit, and seize the opportunity to jump on the AI train sooner rather than later. If there was ever an ideal time to consider creating an AI strategy, now would be that time. If not, "those that continue to fall behind may find the playing field tilted evermore steeply against them.”
Jump on the train or get left behind.