Disruptions – one of the trendiest terms in business today – are shaping industries all over the world. Many businesses forget that disruption often starts with inefficient processes and changing customer expectations – not technology. Advanced technologies are rather a helping hand for improvement. With that in mind – we need to shape our business the way the consumer wants it. And AI is a great innovation to make it happen.
Between recognition and skepticism
Artificial intelligence (AI) is already changing the way people live and work – and has the potential to change the business world even more profoundly than the Internet has done. According to a recent study by PwC and the market research institute Kantar EMNID, AI will contribute 15.7 trillion US dollars to the global economy in 2030. Compared to companies from countries such as China and the USA, German companies are still lagging behind when it comes to AI deployment. There are several reasons for this, most of them we’ll elaborate later on, but predominantly it can be traced back to the issue of data privacy. No wonder Germany was one of the first countries to implement the EU GDPR – the most important change in data privacy in 20 years. Despite all the benefits AI can provide – from cost cutting to life saving – mistrust of the new technology prevails. A recent IDG study reflects the extent of this mistrust: According to the study, in 2019 57 percent of companies in Germany “already” use machine learning (ML) and artificial intelligence (AI). However, this means that almost half are still not using AI and ML – clearly we still have a long way to go.
While many businesses surround themselves in a cloud of skepticism, others are thriving by accepting the change. According to Ernst & Young, “Some brands won’t survive the rise of AI. Others will use it to form a much deeper relationship with consumers”. Considering the positive impact AI has on businesses – increased profitability, maximized efficiency and that competitive advantage so many businesses are searching for, the use of Artificial Intelligence makes sense. One thing that will become even more clear throughout this post: businesses cannot afford to hold a dismissive stance much longer.
Although many people seem to be hesitant to implement AI technology in their businesses, they often (unknowingly) rely on AI in their everyday life and some even can’t function without it. Food ordering services like Deliveroo, navigation systems, anti-virus software that protect email accounts and spell-checking features which have become standard to us, are all based on Artificial Intelligence. Fun fact: 80% of what we’re watching on Netflix is driven by their algorithms’ recommendations.
Companies like Netflix didn’t get to where they are today because they were lucky – they put their customer in the center of focus and use AI as a tool to achieve this. Going forward, this will become even more important, as AI will become a significant bridge between brands and consumers.
For risks and side effects, ask your trusted IT specialist
According to PwC, control and security are more important to companies when implementing AI (91 percent) than efficiency (77 percent). However, many companies still find it difficult to assess and control the risks associated with AI. This is due in no small part to a shortage of skilled workers in the sector. There is often a lack of understanding of what happens to the data collected and what the technology’s decision-making process is like. Currently, AI is still a “black box” for many. In addition, many companies underestimate the potential and necessity of AI. The increased risk of hacker attacks on AI systems is further fuel for rejection and lowers the willingness to invest. According to the PwC study, 49 percent of the companies here rate artificial intelligence as irrelevant. The technology has enormous potential to optimize and automate processes.
Openness and transparency promote trust
In order to reduce skepticism towards AI and to promote its use, it is essential that the machine’s decisions are presented transparently. Only if the user comprehends the results, will he or she gain trust in the AI solution. A black box, on the other hand, can cause even the best solution to be left unused because decisions are not comprehensible.
For precisely that reason, aifora offers a glass house, rather than a black box solution for retailers. Clients maintain a permanent overview of their data and can follow the decisions made by the AI software, as the system transparently displays all decisions in a user-friendly web interface. In addition, the application also displays a forecast quality, i.e. the validity of the data basis on which the respective price and inventory decisions are based. The users can therefore decide for themselves when they want to intervene and overwrite the system’s decisions.
Customer-centricity in a world of constant change
The right product, in the right place, at the right time takes customer-centricity to the next level. With its practical and easy-to-use pricing and inventory solutions, aifora delivers artificial intelligence to retail companies. The aifora platform forecasts customer demand across all channels, taking into account all possible influencing factors – from weather and seasonal events to competitor prices, location and sales channels.
In a recent report, EY claims, “it will be impossible to satisfy the consumer’s fulfillment expectations at a profit, without working together with other retailers.” Competitors will strike unexpected alliances in order to put the customer first. This is why aifora follows a Collaborative Machine Learning approach whereby retailers can anonymously share their data and thus benefit from more accurate decisions. The more companies feed their data into aifora’s digital ecosystem, the more comprehensively and precisely the algorithm can forecast demand and make pricing and inventory decisions for each retailer accordingly. Each retailer’s unique strategies and business rules are of course still adhered too.
Enter the world of AI
aifora enables its customers to quickly and easily enter the world of AI without the need to develop their own technology. The level of automation can be continuously increased according to the users’ needs and preferences. This means that more and more companies are increasing their sales and turnover without risk and with full transparency, control and traceability. They are building trust in AI and have a good chance of getting some of the projected $15.7 trillion in 2030.