Zihong Lien

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It must not be new to you that artificial intelligence is something remarkable. Something which has moved up the agenda of most large technology based companies. Chinese e-commerce firm Alibaba for instance has recently announced the investment of 15 billion dollar in research and development, with emphasis on artificial intelligence. New international R&D research centers focus on data analytics, artificial intelligence and quantum computing. (Vincent, 2017)

Artificial intelligence enables computer systems to perform tasks which previously required human intelligence, such as visual perception, speech recognition, decision-making through neural networks etc.

An example of the current use of the technology is the Virtual Personal Assistant Alexa, by Amazon. The device allows you to play music, make to do lists or home deliveries, and conceive real time information, all through voice recognition. Another Personal Assistant is X.IA’s Amy, which can interrogate communication and determine if humans are talking about arranging meetings. When identified, Amy examines each person’s agenda and finds non-conflicting times to present these to all parties through email or group message.
A different example would be self-driving cars. Companies such as Google, Uber, Apple, Volkswagen and Mercedes are heavily investing in the development of automobiles powered by AI. (Maguire, 2017)

There is a bright future ahead as the technology is still in its infancy; the possibilities are endless. Nonetheless many people have already expressed their concerns on the topic throughout the internet. For some, there is great fear of the unknown. How self-learning might enable machines to one day overpower their creator, indeed just like in the movies. From cases such as Kasparov and Deep Blue we have already seen how AI was able to outplay world’s best Go-players. An interesting argument expressed online against access development of artificial intelligence compares the future of human to animals and the impact of evolution. According to Harari, some people ‘justify’ the abuse and exploitation of animals with ‘superior’ intelligence. So what if machines were to reason their actions according to such logic?

Bisschop, J (2017). AI in de toekomst: en als de robots de wetten gaan overtreden? Retrieved from: https://www.frankwatching.com/archive/2017/04/09/ai-in-de-toekomst-en-als-de-robots-de-wetten-gaan-overtreden/ [21-10-2017]
Maguire, M (2017). 10 Real life examples of artificial intelligence. Retrieved from: https://www.devteam.space/blog/10-real-life-examples-of-artificial-intelligence/ [22-10-2017]
Vincent, J (2017). Alibaba is spending $15 billion on researching quantum computing, AI, and more. Retrieved from: https://www.theverge.com/2017/10/11/16458486/alibaba-research-investment-fund-15-billion-ai [22-10-2017]

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We are constantly reminded of the growth of the internet of things and performance of ecommerce. From a consumer’s perspective, shopping has become more convenient than ever. No matter what product or service you might be looking for, whether it be a car, toothbrush or groceries, it is only a few clicks away. For suppliers benefits include the possibility to track consumer buying behavior, increase reach, and also customize offers using artificial intelligence.

Although this is all true, the performance of brick-and-mortar stores is still strong. In fact, even with the strong online focus of today’s society, e-commerce still only accounts for less than 10% of total retail sales and is expected to remain below 20% within the upcoming 5 years. (S. Dennis, 2017)
Some retail locations do struggle and some chains have pulled back, yet this is not unusual at all. Competition and taste change. The “retail apocalypse” often mentioned in the media, as a result of ecommerce, is not representative of reality. We should consider the failure to innovate on the part of most traditional retailers, which has shifted customer preferences and market-share grabs from transformative new models. Physical retail is not going away, though digital disruption is transforming most sectors of retail significantly. Consequently, ‘good enough’ no longer is. Mediocre retailers used to be protected by the scarcity of product and pricing information, assortment ranges, limited geographical competition, and the inconvenience and waiting times bound to product delivery. E-commerce changed all of these factors, and thus expose the weaknesses of many retailers’ business models.

A truthfully transformative and disruptive factor in retail is the fact that most customer paths for transactions which end in physical stores start through a digital channel. Digitally-influenced physical stores sales are much greater than all of e-commerce. Many stores fail to realize this has caused them to waste effort and expenses to build strong online capabilities at the expense of effectively running their brick-and-mortar stores and the overall shopping experience.

References:

S. Dennis (2017) Physical Retail: Definitely Different, Far From Dead. Retrieved 10/10/17 from https://www.forbes.com/sites/stevendennis/2017/07/06/physical-retail-definitely-different-far-from-dead/#4d3439685a28

T. McGee (2017) Deflating The Myth: Why Physical Retail Is Very Much Alive. Retrieved 10/10/17 from https://www.forbes.com/sites/tommcgee/2017/09/19/deflating-the-myth-why-physical-retail-is-very-much-alive/#fdaa2d973d1a

The development of Artificial Intelligence

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Is physical retail disappearing because of digital commerce?

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