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- NextOrbit is an AI service provider that focuses on helping smaller retailers access the business benefits of artificial intelligence.
- CEO and founder Kishore Rajgopal told Business Insider that smaller companies stand to gain a lot from AI.
- "Your profits go up. The outcomes are very measurable. That’s the whole point of using AI," he told Business Insider.
- Read how AI is transforming healthcare, transportation, investing, and more in other articles from our special report, How AI is Changing Everything.
There’s a lot of hype out there about AI in retail. Plenty of big-name retailers have already employed the technology to boost profits and delight consumers, like with Walmart’s AI-powered "store of the future" and Sephora’s shade-picking technology.
But there’s a slight lag when it comes to the smaller fish in the retail pond.
"We’ve found that for small businesses, which we qualify as businesses that have less than $10 million in annual revenue, only 15% say that they have implemented AI-powered chatbots," Matthew Reynolds, an assistant editor at global consulting firm Oxford Economics, told Business Insider. He and his colleagues surveyed 324 executives about their thoughts on AI in retail in 2018.
The percentage jumps up to 39% for businesses with over $10 million in annual revenue and to 67% for companies with more than $1 billion.
"There is a sense that this is a game for the big boys, and that mom-and-pop retailers are being left behind," Oxford Economics technology practice lead Ed Cone said. "But if you’re behind, you’re not necessarily out of the game."
That’s where NextOrbit comes in.
Founder and CEO Kishore Rajgopal says his Texas-based company’s mission is to bring AI’s retail capabilities — analyzing sentiment, forecasting demand, and managing inventory — to small and medium-sized retailers.
Courtesy of Kishore Rajgopal
NextOrbit is an AI services provider with clients like India-based online jeweler CaratLane, US grocery services firm Grocer Exchange, and Percentil, a used fashion retailer based in Spain.
Rajgopal said he’s particularly passionate about offering AI tools to retailers for a reasonable price, so that the technology isn’t exclusively in the hands of giants like Walmart and Amazon and other contenders that can foot the bill for "huge armies of data scientists."
But, mostly he’s convinced that AI integration in retail is just good business. And the existence of a company like NextOrbit further indicates the technology’s increased importance. It’s a sign of the early trend of increasingly accessible AI solutions for retail.
"We’re not doing AI because it’s cool or because it’s a trend or sexy," he told Business Insider. "We’re doing AI because there are business benefits. Your profits go up. The outcomes are very measurable. That’s the whole point of using AI."
He spoke about how AI can prevent retailers from ordering too much — or too little — of a certain product by learning about consumer preferences and taking into account local events that might bolster or dampen demand.
According to Rajgopal, the same thing goes for pricing. Striking a balance between charging too much or too little is a classic business conundrum. But, AI applications can help a retailer settle on the perfect price point.
Cone told Business Insider that the mega-retailers of the world will likely continue to use AI to power their massive logistical operations, complex demand calculations, and "fleets of robots." But that doesn’t mean that companies like NextOrbit’s clients have nothing to gain.
Cone reiterated the example of a mom-and-pop shop using a chatbot to provide customer service on its website 24/7.
"I do think smaller retailers think, ‘Oh that’s not for us,’" Cone said. "And they’re wrong. As a matter of fact, AI could be a competitive advantage."
Rajgopal said that he’s seen retailers run into two major hurdles. One is centered on plugging sub-par data into the applications. The other simply revolves around second-guessing the AI-produced solutions and their own ability to put those solutions to good use.
"What you find is that actually the first challenge is, ‘How do I integrate this with my existing processes and systems at scale?’" Luq Niazi, IBM’s global managing director for consumer industries, told Business Insider. "You’ve got to have an integrated approach to driving AI across that value chain."
But for Rajgopal, the benefits of AI outweigh those challenges tenfold, especially when it comes to the smaller players in the retail space.
"I feel the time has come for AI to be mainstream," he said.
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- Baby sleepers sold at stores including Target, Kmart, and TJ Maxx are being recalled over fears of infant deaths
- Zulily CEO reveals layoffs and restructuring in internal email that says the company is at a ‘critical inflection point’
SEE ALSO: AI is going to change your career. IBM is showing how that can be a good thing.
Source: Business Insider – feedback@businessinsider.com (Áine Cain)