Lebensmittel-Zeitung: The Service Comeback

Chris Boos, CEO and Founder of Arago, is published with an interview on the future role of artificial intelligence (AI) in the retail sector in Germany’s leading magazine for the consumer-goods industry Lebensmittelzeitung. The article calls Boos an “AI missionary” as he warns against misplaced fears and publically embraces the technology’s advantages.

Boos argues that ultimately the next technological steps in the retail sector would be driven by consumer’s choices. They would define technology’s future development with their decision to hand over data to certain services. Today’s targeting mechanisms would work even better with more data available to providers. In addition, he foresees, the next decade to be defined by a return to the old values of excellent customer-relationships and personal services.

Not the machines but the valuable social interactions between a brand and its customers would define the retail-customer experience in the future. With administrative tasks, logistics and ordering management out of the way, stationary trading is going to focus on luxury, the social experiences of consumers and strengthened advice services. In this way, he considers Amazon’s purchase of the high-end, service-driven supermarket chain WholeFoods as a natural step. Boos is confident that instead of creating upheavals on the labor market, AI-technologies will enable the industry to redefine services and brand communications. With the help of machines, logistics will be faster, processes will require less manpower and be more efficient. “What is easy for people is hard for machines and what is hard for people is easy for machines”, Boos concludes.

He is convinced that AI solutions will play an immense role for our societies within the next three to five years. While many are still in awe of new technologies and fear to be overwhelmed by AI, Boos reassures his readers that the technology would still be far from human capabilities. Compared to the power of the human brain, AI is just a better calculator. The human brain has 86 billion neurons and can be powered with only 20 Watt, while a neuronal computer network with 1,2 million knots needs the energy capacity equal to half the output of a nuclear power station. Today, many statistic software solutions would already be called “artificial intelligence”, even though these machines would understand nothing themselves. As such, having a natural conversation with an AI would still be impossible. Solutions just based on machine learning would be so-called narrow AIs, able to fulfill very specific tasks. Yet, the next step would be to work on a general AI – teaching itself and capable of solving a multitude of tasks in different scenarios.

As an example how technologies could create new customer relations, Boos names Amazon’s smart-speaker Alexa. If accepted by the consumers, the technology has the means to be a mediator between consumers and suppliers and redefine the way we buy. He states that if people use Alexa for example to order grapes, the customer would not know anymore where the grapes were bought. Amazon chooses the supplier based on the consumer’s expectations.

Boos considers this is a competitive challenge to vendors and producers. Other fields are already being disrupted by new technologies and experience constant changes. Companies like Alibaba who enable micro-transactions on a mobile phone or Apple who created over 11 million bank accounts with only one software update challenge the ways that people think about banking and finance. In the same way, WhatsApp revolutionized the telecommunications industry with only a team of 20 employees. All traditional enterprises would have to live up to the challenge by the big technology companies. Besides the technology industry itself, the pharmaceutical, banking and insurance sector would be the next areas for increased automated processes.

Arago Redaktion 23. January 2018

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Benedikt Schepp Benedikt Schepp Director Corporate Communications bschepp@arago.co