Deep Dive: Preparing Store Associates for the AI-Powered Shopper

0:00This episode was brought to you by KWI.

0:30smarter and dealing with the customer. You have to remember this is a human interaction. So they can't be reading a chatbot when they're standing there with a shopper. They need the information immediately and they just need small digestible nuggets that will help them look smarter and make a sale at the end of the day.

0:52Welcome to a special deep dive episode of Retail Remix. I'm your host, Kate Robertson, and today's episode is brought to you by KWI, the unified commerce platform built to help retailers connect every part of their business from point of sale to the store floor. This holiday season, shoppers are walking through retailers' doors with more information than ever. They've spent hours researching products, comparing brands, and checking sustainability claims, all with a little help from AI. So what happens when a hyper-informed customer meets a store associate juggling thousands of products and a line at the register?

1:31That's the gap we're digging into today. We'll talk about how AI tools like image search and in-store product discovery can close that gap and what it takes for retailers to equip their teams for a smarter shopper. Joining us is Josh Goodleman, Chief Revenue Officer at KWI, who's been building the features that help associates keep pace. Josh, thanks for joining us. Thanks for having me. This holiday season, shoppers are walking into stores with more information than ever before. Tell me more about what's driving that shift and how big of a change is it compared to last year? Kate, I hate to be a contrarian to start off, but I wouldn't necessarily say that this shift is about more information.

2:20I would say it's that shoppers are coming in with a higher degree of certainty about the information they're arriving with. You know, I think we all know that nearly two thirds of shoppers are using an AI tool for shopping more and more. And certainly recently, that number is even higher for Gen Z. I think it's something like 80 percent. But it's not about them adopting it. It's about them coming into stores or going online and believing that the information that they have is completely accurate, regardless of what it is. And that is something that retailers now have to deal with because much of the information is coming from AI, which isn't necessarily coming from the brand itself.

3:00Interesting. We're also hearing that customers are arriving to stores ready to ask very pointed questions, like whether a product is sustainable or how it stacks up against a competitor? What kinds of questions are catching associates off guard right now? Great question. I think historically, people are talking about the idea that associates need to be experts about everything related to the product. And for sure, retailers want their associates to be very knowledgeable about the product. But I think it's more about the operational aspects of the business. So sure, they should know, you know, general information about the product.

3:42I would actually categorize it into three different things. I still always say that the most important is availability. So shoppers will come in and say that, you know, AI told me you have this in stock or that you have it in my size. And is that true? The second is about price and policy. So, you know, you're doing comparisons with AI and maybe someone comes in and says, I saw this cheaper somewhere else. I expected you to match it. That's something that associates have to have to deal with. And the last would be, you know, product information. So most shoppers today are just automatically agreeing with or taking the information that AI gives them at face value.

4:23And as I said before, it's not necessarily coming from the brand, but these shoppers are walking in believing that it's truth regardless. So those are the kind of the three things that associates have to deal with on a day in and day out basis. During holiday, especially every minute and every interaction counts when people are coming into those stores. What does getting this right mean for retailers in practical terms? Good question. So, you know, I would say that we'll call it the AI problem, getting the information right, is more about how the information gets surfaced. So this information is living in many different places.

5:02And how does it get surfaced to the associate at the right time without them having to look in six different places? So we all know that retailers have many, many different systems. And the real question is, is that information served up to them in a quick, easy way? Because shoppers are less and less patient, let's just say. and the associate wants to find that information quickly. So it's not necessarily a retrieval problem. It's how it's being served up to them. Associates can really be put on the spot. It's their job to serve customers across thousands of products and endless scenarios while customers are, of course, usually just focused on one or two items when they're coming in and have researched those products.

5:50How should retailers rethink the way they're equipping their store teams for that kind of dynamic? Good question. So at the end of the day, they have to think about their data first. So whether they want to use AI is certainly a question, but they have to think about the foundation. So a lot of retailers rush to, you know, come up with a way in which they're going to serve up that information. But if they don't have their foundation accurate, it's going to be flawed from the start. So things like inventory data, things like product data, things about availability, they have to make sure that that foundation is sound before they even go into the holidays and before they start to think about these tools that are going to help the associates at the end of the day.

6:36Let's talk about those tools. Where does AI fit into helping associates keep pace with these more knowledgeable shoppers coming in? Let's talk about those tools. You know, we've all seen lots of things out there. If you've gone to a trade show recently, you'll see, you know, many, many different ideas about how, you know, AI could be used. To me, again, I'll go back to the point that I made before. The highest value is about inventory data. It's also about finding information or finding product. So, you know, we've been talking about this for years. You know, customers or shoppers come in and they say, I see this product here or I found this picture.

7:20You know, do you have this? And the associate is sitting there caught cold. You know, how do I deal with this? So things like being able to recognize an item based on a description, based on a photo, based on something that they found versus the traditional, let me type in the SKU number. This is also useful when you think about it. If during the holidays, products get lost in the store, tags get lost in the store and they need to be able to move quickly. So it has multiple use cases beyond just the shopper looking for a particular item. And I think that's, you know, that's an important piece of understanding what tools are really going to help them.

7:58I would also say that, you know, there's a lot of talk about conversational AI and does that really have a place in the store digitally? I think there's no question about it. Digitally, conversational AI is important. But personally, I think that there is a bit of a force or trying to force conversational AI into the store. And my personal opinion is that it doesn't really work. I'll go back again to what I said before. It's about serving up that information in small digestible chunks to associates versus giving them a chatbot in the store that will make them smarter in dealing with a customer.

8:35You have to remember this is a human interaction. So they can't be reading a chatbot when they're standing there with a shopper. They need the information immediately and they just need small digestible nuggets that will help them look smarter and make a sale at the end of the day. For sure. Yes, it would be very awkward to stand there talking to somebody while they talk to a chatbot. You might think, why don't I just talk to the chatbot? Exactly. You've built AI powered features like image search and in-store product discovery. Can you walk us through how those actually work in a live store setting and what problem they're solving for the associate and the shopper?

9:15Sure. I have a very good example. And you'll be surprised that it's not the grandest of ideas. Many people think that, you know, AI solving these massive problems, but, you know, the narrow ones, I think, are the ones that are the most useful. And the example I'll give you is a very narrow one at that. So one of our clients at Pandora Jewelry, who I'm sure you're familiar with, they had a very specific problem that they were trying to solve for. So if you think about Pandora jewelry and the products that they sell, you know, very small charms. And anyone that knows jewelry and jewelry retail knows that it's quite difficult to tag small jewelry items.

9:59So what does that mean? That means that the product is in their cases or on displays without tags. So think about it then in the process of selling those items in a Pandora store as an associate, and they're working with a shopper and they may have four or five, six different items that are not easily recognizable. So the way in which they were doing that before we helped launch this feature and product for them was really searching for the information, either by memory or by catalog or written information. What we did in partnership with them was give their associates a way to identify that product immediately.

10:42So the specific use case is I'm in the sales process. I need to sell these three, four, five charms. How can I identify each and every one of them and add them to the cart as quickly as possible? So they are now, instead of typing it in or looking up the information, they are now taking an image in KWI point of sale. They're using the camera of the iOS device and they're taking a picture of that charm. And it's instantly identifying that product and giving them the ability to add it to the cart. So you might say, well, that doesn't sound very sexy. But when you think about how much business a large global company like Pandora does, they're quite smart.

11:26And the fact that we can shave off seconds, if not minutes from the checkout process by speeding up this identification of the product, you can translate that into more dollars, more sales, quicker, quicker checkouts, and ultimately more revenue for the company. So it's those types of use cases that I think are very relevant. Yeah, that's so cool. A lot of retailers are saying they want AI in their stores, but few have moved past the basics. What are you seeing as brands test AI in point of sale and store environments? And where are you seeing real wins happening? Yeah, I think I saw a stat recently that said that, you know, over 70 % of retailers are running AI pilots, which is a massive number.

12:15Yeah. I think the issue is that it's not necessarily running pilots. It's which one of those are going to see the most value. And not only that, but even if they decide on one, how do they get from pilot to rolling it out to the entire chain? So for me, and what I've seen with our clients and other retailers is showing value in things like save the sale or endless aisle, not new terms, by the way. These are kind of mundane things in the retail world, but using AI to improve these processes is important. We talked about finding products by description, image, etc. That's another one that I think is very useful.

12:57Making the returns and exchange process very easy. how many people walk into a store and want to return and exchange something and they have no information. They don't have the receipt. They may have the product. How do you identify that quickly? Clientelling is another example. So customer information, again, serving up that customer information. There's a lot of value to knowing your customer better. And then lastly, I would say associate task guidance. So making those tasks quicker, more efficient. There's also a stat out there that a tremendous amount of staff are spending time, hours, quite frankly, off the sales floor doing manual tasks.

13:36So how do you kind of use AI to help them get out of the back and improve those processes so that they can spend more time selling?

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14:15When it comes to retailers who are really getting value out of AI right now, and the ones that are sort of stuck talking about it, or perhaps stuck in that pilot process. What are you noticing is sort of separating those two? Probably the ones that are picking a workflow versus a technology. So they're identifying a workflow that maybe is costing them too much money or is wasting money and attacking that. What I always say, and the retailers that I talk to, the executives that I talk to, they want to either save money or make money. It's pretty simple. So attacking the problems or the issues in that way is really going to be the most successful.

14:59If you think about it, if you can't name the number that you are trying to move, then the AI project is worthless. But companies all over the country and the world are creating budget line items for AI, and they don't necessarily even know what they're trying to solve for. So again, if you can't tell me or if you can't name the number that you are trying to improve on, whether that's saving money or making money, then it's really not going to be successful. So the retailers that I speak to have a very clear vision and a very specific vision on these are the things that we are attacking. We know X is taking us this much time and it's costing us this much money and we want to improve it 10, 20, 30 percent.

15:44And we're going to use AI to attack those things. Holiday puts a unique kind of pressure on store teams with higher traffic seasonal associates, more gifting shoppers, and often less time to spend with each customer. How can retailers use technology and AI to help associates deliver a great experience even when the store is at its busiest? Yeah, so this goes back to something I touched on before, which is the ability to serve up that information at the right moment, right? And also to enable associates to do things that maybe they couldn't do before. So having a very clear vision for the associate in terms of what are they authorized to do.

16:33I'll give you some examples. So can they give a VIP customer a, I don't want to say a discount, but can they make an adjustment on an order because something went wrong? Do they have to go to six managers and contact corporate to make that happen? or can they make the decision right then and there? That's a great example of serving the shopper in a busy time. So as you said, in the holiday times, you don't have time to run things up the chain to get something done. So empowering associates to make decisions and giving them the tools to make those decisions in the technology that they're using is paramount to anything else.

17:17And ultimately, it's going to help those retailers increase their business. And if you think about it, where is that happening? Point of sale, if you really boil it down, there's many systems that retailers use. But what system is at the forefront of the interaction between an associate and a shopper? It's often point of sale in today's day and age. It's mobile point of sale. So there's no distinction in most places between, oh, I have a point of sale and then I have a clienteling solution or I have a point of sale and I have an inventory solution. If you're a retailer that still is battling that where you're using different systems for all of those things, then the experience is not going to be what it should be for the holidays or for any time of the year for that matter.

18:03We're going to finish off by looking ahead. And I have a feeling I know what you're going to say in response to this question. But what should retail leaders be doing today to get their teams and their tech ready for a shopper who is only going to become more informed from here? Yeah, so I may repeat a little of what I said before, right? So product data, you know, is important, but I would say the other things are even more important. So we call it the informed shopper and they're coming in with all kinds of different information. But you have to treat the things appropriately. So product data is important.

18:44Inventory data, I would argue, is even more important because you can have the most perfect product data in the world. It could have the most accurate information. But if your inventory is not accurate, you will never be able to make the sale. It's just not going to happen. The other is customer information. So I hate to sound like a broken record, but it's those three things. product data, inventory data, and customer information. AI is kind of the last. And I don't mean that it's not useful, but the AI is leveraging that data and serving up that data. So if you think about it in that way, that's the most important thing.

19:25Something like 90 % of retail orders are still fulfilled from stores. People don't necessarily believe that. Obviously, e-com and e-commerce is a very, very large business. And if you've been in retail, you know that the pendulum has swung back and forth between the digital and physical for certainly as long as I've been in it. And there are, you know, retail has been going on for much longer than that. You know, for two or three years, it's the, you know, the physical store is back for two or three years. It's, you know, digital is back, but the reality is they're both here to stay and the retailers that kind of master both of them, but don't take their eye off of the importance of both of them.

20:06Those are the ones that are going to win. Super interesting. Josh, thanks so much for joining us today. Thank you. Thanks for joining us for another episode of Retail Remix. Be sure to subscribe so you don't miss a future episode. You can find us on Spotify, Apple Podcasts, YouTube, or your favorite podcast app. Until next time, keep mixing it up.

20:31Thank you.