The Managing Director of Google Australia, Jason Pellegrino has said that Australia is at risk of missing out on a $2.2 trillion boom in the artificial intelligence (AI) arena. Is the e-commerce industry also falling behind?
On Thursday, Google’s HQ in Sydney hosted an event to celebrate the country’s AI stories. However, while Pellegrino praised businesses from the conservation, language, healthcare and art and culture sectors, he also told attendees that more needs to be done if Australia hopes to take advantage of the “$2.2 trillion of economic growth available to Australia through automation”.
According to Pellegrino, Google made its stance on AI very clear two years ago, when the business announced it would be an AI-driven company.
In order to advance, Pellegrino believes businesses need to forget about what they’ve done in the past, and start thinking about how automation can help individual companies progress, as well as the nation as a whole. Australian businesses are reportedly adopting this approach to automation a lot slower than the US, with only eight percent of Aussie businesses adopting AI, compared to 20 percent of businesses in the states.
“We need to double our pace of adoption in order to capture this economic growth,” he said.
This is something that relates to the e-commerce industry as much as any other sector. Research has shown that Australian consumers respond positively to AI, particularly when it’s paired with a strong customer loyalty scheme.
So, which e-commerce businesses are adopting AI and augmented reality (AR) to create a more customer-focused shopping experience?
It’s no secret that this major e-commerce player is kicking goals in the AI sphere. Machine learning is at the core of everything Amazon does. This tech reportedly generates as much as 35 percent of the businesses total sales just by automatically generating personalised product recommendations based on a users search and purchase history.
The company has also adopted the use of robotics in its fulfilment centres to ensure products are packaged and shipped in the most efficient manner possible. Back in 2012, the online marketplace spent $775 million to acquire robot manufacturer, Kiva Systems Inc. Now known as Amazon Robotics, this branch of the business has allowed Amazon to put an estimated 100,000 robots to work in its warehouses across the globe.
JD.com has also reportedly implemented the use of robotics in its warehouse and fulfilment centres, in a bid for the company to cut costs and increase revenue.
In May 2016, the business had reportedly established seven logistics centres that operate as many as 209 warehouses throughout China, including its key automated logistics and warehouse complex in Gu’an China.
As a result of the businesses investment in robotics, JD.com claims it was able to double the number of orders it was processing, with 85 percent of those orders being delivered within two days.
By November this year, the company is expected to debut another new warehouse, where AI will handle all tasks relating to parcel sorting, packaging and categorisation.
“Why must JD.com use AI and robots today? It is because we have exhausted all traditional technology and methods to improve retail costs and bring efficiency to its maximum potential. This is not because we like to follow a hot trend. This is our only choice to achieve another critical breakthrough in efficiency maximisation,” Richard Liu, the CEO of JD.com said in a statement in July 2017.
Alibaba’s ‘New Retail’
Alibaba has taken a direct approach to AI, using it to create fulfilling shopping experiences for its customers, a concept which the company introduced to Australia when it brought its ‘New Retail’ pop-ups to Melbourne and Sydney in April this year.
According to Alibaba, the future of retail is already happening in China, and the Australian market is in prime position to start adopting technology that brings the best of online and in-shop experiences together. For the $32 billion company, this future is deeply rooted in game-based shopper discounts, QR codes and facial recognition.
The company’s ‘Magic Mirror’ is an example of this technology, which Alibaba believes has the potential to transform the way women shop for makeup.
Designed for use in women’s change rooms, the Magic Mirror allows consumers to take a photo of them and then trial different makeup looks. This includes everything from ‘party’ looks to casual ‘office’ looks. If a consumer likes one, they can then select and purchase the products that were used to ‘virtually’ create it.
The ICONIC is another e-tailer taking advantage of new technology to improve the shopping experience it provides its customers with. Utilising Alibaba Cloud’s AR technology, The ICONIC launched its visual search tool ‘Snap to Shop’ in December 2017, which allows its customers to search for clothing, sportswear and accessories simply by uploading a photo or taking a snap via The Iconic app.
“With two out of three of our shoppers purchasing via The Iconic mobile device this year alone, we know there is a strong demand for a mobile-first and more personalised shopping experience,” says The Iconic’s Chief Technology Officer, Zoe Ghani said at the time of the release.