July 17, 2024

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Impact of ChatGPT in the retail & ecommerce space

3 min read
Impact of ChatGPT in the retail & ecommerce space

By Michael Smollan. Smollan Chief Growth & Innovation Officer. The real buzz started earlier this year: “mind-blowing, am obsessed, scary good, Google should be nervous, going from theoretical to practical overnight,” and even, “it creates a misleading impression of greatness”.  Welcome to the wonderful world of ChatGPT, a new AI unicorn pegged by experts as probably the biggest breakthrough in artificial intelligence with regards to every day applications.

And so, it begins. What is ChatGPT all about? Could this bot enhance service excellence in retail and more importantly streamline ecommerce services? What are the general pros and cons? How will this AI chatbot change the face of online retail?

Developed by OpenAI, Chat Generative Pre-Trained Transformer (ChatGPT) was launched in November 2022. A computer program that simulates and processes human conversation (written or spoken), allowing humans to interact with digital devices. One can have a conversation with ChatGPT as its name suggests, and ask it to write essays, create recipes, make a medical diagnosis (breathe!), mimic famous authors, lay out complex mathematical theorems described in the language a six-year-old can understand, and even code software. It uses a deep learning technique called “transformer architecture” to sift through several terabytes of data alarmingly quickly and with a respectable degree of accuracy.

Convincing and cheap solutions

Charged Retail reported that at a high level, these type of bots can, within the retail space, allow for dynamic loading and automatic categorisation of product catalogues; create dynamic product descriptions; write product sheets; reduce repetitive admin; allow for high quality automatic translations; and bring a wealth of data and customer insight to analyse purchasing patterns, customer reviews, sentiment analysis, promotion success and returns data. At the same time, removing a lot of legwork needed to scale up ecommerce.

One of ChatGPTs main drawbacks is also its primary strength, as all information written by the model is taken from the internet and interpreted using its machine-learned algorithm. At face value, as reported by Charged Retail, ChatGPT is quite scary. However, for the mundane administrative tasks and key operational areas that retailers might need to complete, it offers convincing and cheap solutions. For more creative needs, it still won’t be able to compete with a human counterpart. Let’s not forget however that it’s still in the testing phase – so watch this space.

Furthermore, in a recent article on CMS Wire, the bot’s potential applications in marketing, sales, customer service and content production, are far-reaching. Retailers could use ChatGPT to generate personalised content for marketing campaigns and create chatbots that can answer customer queries and provide information about products or services, thereby enhancing the customer journey. By way of example, according to tech firm Digiteum, existing AI chatbots can increase conversions and reduce cart abandonment by 30%. A more perceptive bot such as ChatGPT could raise that figure exponentially. The bottom line is, that it can be applied to practically anything.

ChatGPT has democratised AI, but like all new tech it comes with risks as reported in a recent Mail and Guardian article, with challenges around contextual errors, prejudice, and credibility. Despite this, the tech is regarded as the fastest growing in history, garnering over 100 million active users in two months. For context, TikTok took nine months to reach 100 million users. Business Day suggested that the big opportunity for business lies in fine-tuning the models for specific uses and that we are going to see a period of frenzied experimentation as companies search for all potential applications of the tech. Within the next five years it is expected that any knowledge worker will be able to use this tech to complete their everyday work.

Perhaps one will ask in years to come, “Where you were when ChatGPT hit the streets?” Sounds dramatic, but these are defining moments. The innovation will be in how we partner with an AI ‘app’ that has over 1.5 billion parameters with the potential to shake up the way we interact with humans and a digital interface, forever.

 

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