The trend: Retailers are looking for ways to implement generative AI in their organizations.
In addition, a number of companies have announced retail-specific generative AI tools to help retailers and other enterprises reap the benefits of the new technology.
The opportunity: One of the most promising immediate use cases for retailers is to incorporate generative AI into customer service chatbots, enabling speedier, more relevant assistance and increased customer engagement.
The pitfalls: Despite ChatGPT’s impressive capabilities, it remains a tool in development, as OpenAI CEO Sam Altman has taken pains to note. Not only is it capable of creating or spreading misinformation, but its responses can also be inaccurate or plagiarized, all of which can erode consumer trust.
More importantly, the lack of transparency around how OpenAI uses the data being fed to ChatGPT—and the fact that all user conversations are fed back into the models to improve future results—raises questions about whether confidential or proprietary information could end up becoming available to the public or competitors via a few well-crafted prompts.
The big takeaway: Generative AI holds significant promise for retailers. Not only can it power a better customer experience, but it could eventually become a more sophisticated form of predictive analytics, giving companies actionable insights into everything from the best locations for new stores to where to target investment.
However, its applications in the short term will be limited as companies work out how to implement generative AI without risking customer ire or giving away too much information on the inner workings of their businesses.
Go further: Check out our report on ChatGPT and Generative AI for more on where the technology will have the greatest impact.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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