Online Retailer day two: Implementing GenAI and ‘messy’ innovation

Out-of-the-box thinking and camaraderie were the hot topics on day two of the Online Retailer conference in Sydney which had the attention of the industry’s leading suppliers and retailers.

The keynotes on day two of the Online Retailer conference centred on innovation to optimise customer service, sustainability and business operations within the retail industry.

Kogan’s chief technology officer Goran Stefkovski talked about advancing customer interactions in his keynote on the next wave of generative AI.

Stefkovski shared Kogan’s approach to working with the new wave of GenAI, which he views as requiring 20 per cent effort for 80 per cent customer value.

“Optimising that last 20 per cent is really hard and in most cases sometimes it’s not worth doing – yet because you can move and focus on another piece of your journey or your engagement or conversion, you can do another piece of 20 per cent effort and get 80 per cent value,” Stefkovski said.

Some of the most common use cases so far have to do with personalisation, merchandising and marketing, Stefkovski said, “but I don’t think it should always be thought about in that sense”. 

But there are also risks. 

“Please don’t use a Chatbot to summarise any legal documentation because it doesn’t know what it’s doing,” Stefkovski warned. “It makes a great sounding confident summary, don’t rely on it perfectly; always do your own research.”.

Stefkovski highlighted US big-box retailer Walmart, which built an AI bot to handle negotiating contracts with product suppliers, for example.

He added that Kogan has implemented AI to assist with marketing and summarising reviews, in addition to summarising video calls with Spinach AI to record and transcribe meeting notes, allowing staff to be more engaged.

In addition to this, he highlighted a personal use case where he took a photo of a Japanese instruction manual and asked ChatGPT to translate it and flagged how this could be used in a business sense.

Stefkovski concluded by saying that the best use case for AI, currently, is as a personal assistant, noting that it struggles with scale due to a lack of humanisation. He encouraged the audience to get creative, explore and learn the boundaries of generative AI.

Collaboration is key

In a panel on sustainable e-commerce practices, Alice Kuepper, head of sustainable business and CSR at Winning Group, shared how the appliances company has embedded sustainable practices into the business by touching what they can control.

“Most customers shop with us because of the incredible experience. We’re well known for having a very high Net Promoter Score (NPS) – it’s above 80,” Kuepper said.

Solving the issue of what consumers do with old appliances has created an opportunity for Appliances Online to differentiate and provide exceptional customer service with its complimentary takeback and recycle program.

“We touch what we can control,” Kuepper said.

“We’ve invested into teams at our distribution centres who sought those materials and work with recyclers across the country to have those products recycled and where possible remanufactured. The expanded polystyrene, for example, that goes to Asia was remanufactured into skirting boards and picture frames. So that’s in a nutshell, the program,” she said.

“We don’t manufacture, so our opportunity to control the circularity piece in terms of manufacturing is very limited, but what we can control is that end of life, which is only one part of product stewardship,” Kuepper said. 

She noted that the retailer takes a hit on the margin because it covers the cost of the program, “but it does tie in with what we stand for, which is an incredible customer experience”.

Ainsley Simpson, CEO of the Seamless Clothing Stewardship Scheme, said that “closing the loop much like Winning is doing for their products is something that we urgently need a system for”.

Kuepper added that “collaboration is important” in this space, and noted that “even as an electronics category, we have a link to the clothing industry”, highlighting the shedding of synthetic clothes fibres in washing machines. She pointed out that certain appliances can prevent these fibres from going into waterways. 

“It’s about thinking about how do these systems actually interlink and what role do we even as an electronics industry play in the clothing industry and thinking about how can we create efficiencies or awareness and education because that’s at the core,” Kuepper said.

“It’s very much about how can we change behaviors so that the end result is scalable.

“We need to scale this so it becomes a way of doing business for all businesses.” 

Panellist Abel Butler, CEO of HealthPost and The Future Co, highlighted that most of the business’s carbon emissions come from its logistics, and while some people question the value of offsetting carbon emissions – rather than reducing them to begin with – he personally believes that it is “is better than doing nothing”.

Butler elaborated that the next biggest emitter for the business was staff commuting and the company inputs that into its carbon calculations.

“I think the most important thing is once you start measuring it and being accountable for it, then that drives transparency,” Butler said.

The next part is to look at emissions from partners in the supply chain.

“We’re beginning to account for their scope and that’s pushing those conversations with them, which to me is the interconnectedness, cooperation and collaboration that’s so important,” Butler said.

“It’s a complex and connected problem that we’re all trying to solve. So we need to work together,” Butler added.

Simpson said it’s up to retailers to bring more renewable, recyclable and less carbon-intensive products into the system. 

“We have the ambition that by 2030 all of the responsible brands that are [part of]Seamless will be deploying our circular design guidelines,” Simpson added.

The Seamless Clothing Stewardship Scheme aims to transform how clothing is made, used, reused, and recycled in Australia to create clothing circularity by 2030. 

“Systemic change is messy and it’s not going to be linear, it’s going to be something that we continuously improve together. Recognising that perfection is never ever going to be the outcome [is important],” Simpson said.

The panel’s general consensus was that businesses within and adjacent to retail need to take ‘every single opportunity to do better because better never stops.’

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