Reimagining Businesses with AI

CHAPTER 6Transforming Retail with AI

“You cannot run a successful retail business from memory.”

—Attributed to musician John Hartford

INTRODUCTION

Retail is one of the oldest industries with the biggest impact on the economy of any country. Organized retail has a history of more than 150 years. In the pre-COVID-19 scenario, counting all categories from groceries to clothing to hospitality to electronics to jewelry to automotive retail and so on, this sector is over $25 trillion⁽¹⁾ and represents between a third and a quarter of the global GDP. This sector is one of the biggest employers and is most sensitive to any socioeconomic trends or events. This sector is also poised for some of the biggest transformations in the next 5 to 10 years driven by the recent technological advancements. Billions of dollars are being spent already and benefits worth hundreds of billions are expected to be generated from those investments.

Let us start with a powerful transition case study. Less than 10 years back, Stitch Fix, a startup, was born in San Francisco, which in a few years disrupted this massive industry, even forcing giants like Amazon to study them intently and be influenced by Stitch Fix in some of its operations. From its humble beginnings in 2011, Stitch Fix crossed the $1 billion revenue and 2 million customer-base in a short six years, a feat that took many established players much longer to achieve. This is the first retail company that we can say was built on AI. Stitch ...