Insights From NRF: The Intelligence Might Be Artificial, But the Implications Are Not

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From left to right: Alfred Kelly, CEO, Visa; Karen Katz, President and CEO, The Neiman Marcus Group, Inc.; and Jon Fortt, Squawk Alley Co-Anchor, Fortt Knox Host, CNBC discuss the future of payments.

Insights From NRF: The Intelligence Might Be Artificial, But the Implications Are Not

By Jessica Binns - 01/18/2018

There was plenty to behold at the National Retail Federation’s Big Show, hosted at the Javits Center in New York City from Jan. 14-16. After years of “omnichannel” being the buzzword du jour, “artificial intelligence” (AI), “machine learning,” “computer vision,” and “chatbot” were the mantra for exhibitors and attendees alike. But there was evidence aplenty that other emerging technologies are further penetrating the enterprise and influencing not only the way business will get done in the years ahead but also how consumers will interact with brands.

A bead on blockchain: food safety first

To date, IBM has invested $25 million in blockchain R&D, which has produced a real-world application focused on food safety and developed in partnership with heavyweights ranging from Tyson Foods and Unilever to Kroger, Nestlé and Dole. Walmart built its own food safety platform on the backbone of IBM’s blockchain technology. Driven by the consumer demand for increased transparency and visibility into the food supply chain, IBM’s efforts in blockchain offer a solution to identifying how fresh food really is and from where it came. As a refresher, blockchain is a ledger technology that secures and links groups of “blocks” of information via cryptography.

Leading with light

Panasonic and McDonald’s (in Asia, naturally) are making ordering fast food as simple as tapping the interactive menu being projected from overhead onto your table. Big picture, Panasonic is doing a lot with light technology as an avenue to deliver engaging consumer experiences. For example, its LinkRay technology is an advanced content delivery platform that uses visible light to enable everyday smartphones to read IDs sent from LED transmitters, such as displays, signboards and spotlights, and to connect to associated mobile content. Point your phone (with the appropriate app downloaded) at a restaurant’s display to unlock content about a menu item, for example. Disney partnered with Panasonic last year to use the technology as well as its projectors to power some of its entertainment experiences.

Pepper gets an upgrade

Known largely for its payments technology ecosystem, Ingenico showed off a custom application for that sassy little retail robot, Pepper. (It’s a sign of the times when hanging out with a robot is now fairly unremarkable.) Using a tablet attached to the robot, hotel guests can handle check-in on their own terms, activating nearby hotel key cards to access their reserved rooms. As you’ll see in the video at the link above, Pepper’s interactivity guides users though the process, offering confirmation at appropriate moments to ensure guest confidence. What’s more, the application promotes offers for services on the property; that could be a discount on ski or snorkeling equipment rentals, for example, or a percentage off when a guest chooses to dine at the on-site restaurant. Ingenico sees its customized Pepper prototype as a potential differentiator for hotel brands that want to attract attention and curiosity but deliver a seamless experience that lives up to the hype and solves a continuing guest pain point: the check-in queue.

Brushing off Bitcoin

Visa CEO Alfred Kelly believes that cryptocurrency should be a low priority right now. Will he have to eat those words? Only time will tell. He points to the wild instability (heard about the most recent “crash?”) in the value of Bitcoin, the most well-known cryptocurrency, as the main argument against its readiness for widespread business applications. Instead, Visa established a Palo Alto research center 11 months ago that’s gathered 250 doctorate-level research scientists to grapple with technologies such as blockchain and machine learning and identify how they might transform the enterprise. “Don't just fall in love with [a technology] because it's the sexy term of the day,” Kelly says. “See what it really can do for you.”

Your virtual varietals expert

Would you chat with a virtual sommelier? That’s what Magia AI is betting on. The seed-funding-stage startup out of Silicon Valley has developed an artificial intelligence chatbot, deployed with two wine stores and powered by natural language processing, that guides customers through the wine selection process, which can be overwhelming for consumers who aren’t too familiar with all of the grape-specific terminology out there. Its database covers nearly every wine in the world. Looking for something white and dry? Your virtual sommelier will offer up some on-target suggestions. It can tell you more about wine regions and their characteristics and even share granular details within varietals. Not sure how to pair with food? Type in what you’re cooking and the chatbot helps solve your culinary conundrum.

It’s easy to envision this kind of application tableside in a restaurant, on some sort of smart device. While some guests may enjoy interacting with an in-the-flesh wine expert, again, some less knowledgeable customers may find the process intimidating. Is the sommelier just trying to push the most expensive bottles? A virtual sommelier — which doesn’t have any “skin in the game — could boost sales as it helps customers select exactly what they’re looking for, without having to worry about someone they might perceive to be a “wine snob’ judging their choice of Two Buck Chuck.

Staying ahead of AI with caution and consideration

Artificial intelligence was a hot topic throughout the NRF sessions. Speaking broadly on AI and innovation, Michelle Bacharach, founder and CEO of ecommerce and mobile AI “complete the look” fashion startup FINDMINE, encouraged companies to reconsider how they approach and think about the new and the novel within their enterprises. “Make trying new things part of performance reviews and bonus compensation,” Bacharach says. “How many new things did you try this year? We all talk about ‘failing fast’ but do you reward people for the things they try that fail?”

It’s human nature to dismiss something you tried that failed in the past but because the pace of innovation is staggering and technologies evolve so quickly, businesses are wise to revisit innovations that just a year or two ago might not have been ready (or appropriate) for prime time.

Speaking of rapidly evolving technologies, a panel dedicated to the ethics of AI explored the questions businesses must ask as they consider and deploy artificial intelligence.

  • The common assumption that “more data is better” is not always true, says Francesca Rossi, AI ethics global leader and distinguished research staff member, IBM Research AI. Businesses launching AI applications must clearly communicate not only who will be touching consumer data but also who will be communicating with that customer: a chatbot or a human?

  • Venerable Tenzin Priyadarshi, director of the Ethics Initiative at the MIT Media Lab, points out that ethics and compliance are not one and the same. Companies most commonly concern themselves with compliance because it’s typically framed by a measure set of rules and regulations. By contrast, ethics is more murky — and continuously evolving. When it comes to AI, business should consider an “ethical by design” approach instead of the traditional “design, deploy, and learn/iterate” process, which opens the door for harm that could have been prevented by considering ethical implications up front. For example, Priyadarshi says, AI can reveal insights about the consumer’s behavioral disposition: is she an impulse spender when she’s feeling down? Does he browse vacation destinations when he’s tired and slogging through the long commute home? Just because you can, does that mean you should? If you know a customer has a substance abuse problem, should you promote your hotel’s happy hour to that individual? Marketers took far too long, Priyadarshi says as an illustration, to learn that it’s not a good idea to target people with limited mental abilities, such as individuals with Down Syndrome.

  • The bottom-line question with artificial intelligence is: what’s profitable versus what’s ethical? says Anindya Ghose, Heinz Riehl chair professor of business at NYC Stern School of Business. Businesses could stand to be rewarded by sacrificing short-term profits enabled by AI for long-term socioeconomic good.