Unveiling the Value: Realizing the ROI of Generative AI in Retail

The debut of ChatGPT marked a watershed moment for Generative AI, igniting excitement across both the technological and commercial landscapes to leverage GenAI’s capabilities. Initially, I anticipated a gradual uptake, expecting to see a modest number of adoptions within the year. With this in mind, I began documenting these early adoptions, predicting a collection of around ten stories post-launch. Contrary to my expectations, the reality was a whirlwind of activity, resulting in a collection of over 160 implementation narratives. Here is a link to my collection (LINK) The rapid pace of change and adoption serve as harbingers of the transformative changes on the horizon. Moving beyond mere adoption rates, the focus shifted to tangible evidence of impact and ROI. Consequently, I embarked on a journey to gather verifiable accounts of GenAI driving real business results. Below are some illustrative examples:

1. Reckitt shared information on its GenAI initiatives in the area of Advertising at the recent Cannes Lions event. They used GenAI to stimulate creativity and produce advertising content more efficiently: By using Generative AI, Reckitt found an approximate 30% reduction in the time needed to adapt and localize ads, with increased consistency in asset quality. Findings showed that time spent on everyday tasks such as a post-campaign media analysis, could be reduced by up to 90%, with the quality improving two-fold. By using Gen AI, teams can reduce concept development time by up to 60%, whilst significantly improving quality.

2. Cdiscount leveraged Azure OpenAI to enhance 70M product listings, leading to recategorization of 23M listings and 30% increase in conversion rates. They combined their AI models with LLMs to optimize the algorithms, improving the accuracy of product categorization. This integration of Generative AI into ecommerce operations demonstrates a significant impact on both efficiency and customer engagement.

3. CarMax has streamlined the creation of text summaries for its car research pages, quickly providing customers with meaningful content that also boosts the pages’ search engine rankings. CarMax harnessed Generative AI to condense an 11-year manual content generation process into just a few months, dramatically accelerating their production of customer review summaries.

4. Stitch Fix began using GenAI to produce product descriptions for its online catalogue of thousands of items. A beleaguered copywriter had to muster the energy to spin up enthusiastic descriptions for each and every product, while taking care to accurately describe the materials and fit. It might take them weeks. Today, they write over 10,000 product descriptions in 30 minutes, a big change from the several weeks it took them in the past.

5. At Adore Me, a lingerie brand acquired by Victoria’s Secret, copywriters used to complain that writing product descriptions was one of their least favorite tasks, taking them 20 or 30 hours a month. Today they jumpstart that process with AI and complete it in a fraction of the time. Adore Me has seen a 40% increase in aggregate non-branded search, meaning that it’s showing up higher in the search results when someone who is perhaps unfamiliar with the brand goes online and does a general search for bras, underwear or swimsuits.

6. At Orange France, GenAI is being used for consolidation of Incident Tickets of complex cases for its Fiber After Sales Service. This reduced the analysis time from 20 minutes down to 3 minutes.  

7. Telstra Australia saw an opportunity to help customer service agents respond to customers more quickly and effectively with the support of generative AI. The Ask Telstra and One Sentence Summary tools are delivering promising results, with 90 percent of employees using One Sentence Summary reporting time savings and increased effectiveness, resulting in 20 percent less follow-up contact. 

8. Klarna’s AI assistant, powered by OpenAI, is designed to enhance the shopping and payments experience for Klarna’s 150 million consumers worldwide, capable of managing a range of tasks from multilingual customer service to managing refunds and returns, and fostering healthy financial habits. Within the first month of being live the 𝗔𝗜 𝗮𝘀𝘀𝗶𝘀𝘁𝗮𝗻𝘁 𝗵𝗮𝘀 𝗵𝗮𝗱 𝟮.𝟯 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗰𝗼𝗻𝘃𝗲𝗿𝘀𝗮𝘁𝗶𝗼𝗻𝘀, 𝘁𝘄𝗼-𝘁𝗵𝗶𝗿𝗱𝘀 𝗼𝗳 𝗞𝗹𝗮𝗿𝗻𝗮’𝘀 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝘀𝗲𝗿𝘃𝗶𝗰𝗲 𝗰𝗵𝗮𝘁𝘀 𝗮𝗻𝗱 𝘀 𝗱𝗼𝗶𝗻𝗴 𝘁𝗵𝗲 𝗲𝗾𝘂𝗶𝘃𝗮𝗹𝗲𝗻𝘁 𝘄𝗼𝗿𝗸 𝗼𝗳 𝟳𝟬𝟬 𝗳𝘂𝗹𝗹-𝘁𝗶𝗺𝗲 𝗮𝗴𝗲𝗻𝘁𝘀.

 These are just some of the 160 Stories that we have captured about enterprises using Generative AI to drive business impact. You can find the entire collection here: LINK

At Microsoft for Startups, we recognize that the retail industry is at a pivotal juncture, where generative AI is not just an option but a necessity for growth and innovation. By harnessing the power of AI, retailers can unlock new potentials, turning data-driven insights into actionable strategies that resonate with the modern consumer’s expectations. By exploring these real-world examples, organizations can gain insights into the strategic deployment of generative AI, aligning with their unique challenges and objectives. These stories are more than just stories; they are blueprints for driving growth, fostering creativity, and achieving competitive advantages in the ever-evolving retail landscape.

Microsoft for Startups is actively collaborating with a diverse array of startups that are at the forefront of pioneering Generative AI applications in the retail sector. These startups offer valuable support to enhance and expedite your internal innovation efforts. If you are interested in arranging a Startup Showcase (https://www.linkedin.com/pulse/unlocking-innovation-microsoft-startups-invites-startup-shridhar-4pojc/?trackingId=hcWRGRiYRpSjdj2BvRzsuQ%3D%3D) to explore the solutions with your teams, do not hesitate to contact me.