Redefining retail: raising capital in the age of artificial intelligence

As the world around us continues to undergo an accelerated digitization and technological advancement, retailers must adapt to succeed

// By George Minakakis, Founder and CEO of Inception Retail Group, and Author of ‘TheNewBricks&MortarFutureProofingRetail‘

Navigating the retail landscape has grown increasingly complex in recent years. In the aftermath of a global pandemic, and amid rising inflation, and climbing interest rates, consumers are adapting, seeking out savings and efficient ways to manage their lives. The industry has been in constant flux for two decades, with the advent of the internet, e-commerce, mobile technology, and digital marketing shaking the foundations of traditional retail - mostly for those in denial of change. These technological advances sparked an unexpected surge in consumer adoption, driven by a desire for greater convenience - a trend that continues to challenge retailers today. They also created massive losses as a result of business failures for those not picking up on the demands of consumers and a digital world.

The previous two decades will pale compared to the transformative changes that are currently on the horizon, which will be ushered in by barrier-breaking technology that forges new paths. Fusing artificial intelligence with the tangible world will revolutionize sectors across the board. The retail domain is no stranger to this wave of change, as it braces for continuous disruption and is poised for the profound shifts AI will bring to consumer behaviour. Investors and financial institutions also look at the retail sector and ask where and how to invest.

The role of AI in retail is expanding, with companies like NVIDIA, which has supercomputers and OpenAI, setting the pace with GPT technologies that are becoming as ubiquitous as the internet itself. Others, such as Figure.AI, leverage sophisticated robotics and GPU supercomputing to pioneer new retail frontiers. These advancements herald a pivotal change for physical retail spaces and their operations.

With all this complexity, imagine being on a video conference call to convince investors and financial institutions of the big ask: capital for your startup. The decision-makers, on the other hand, take your business plan and send it through a platform that’s able to access all their historical data, with queries sent to a GPT system. In seconds, they are told the plan is either strong or weak in comparison with similar investments they have made.

Who will get the nod?

Future-focused startups recognize the necessity of a technology-first approach. The traditional business plan now requires a digital-first blueprint to secure investment, as physical storefronts must prove their relevance in five critical areas: 1) the unique allure that draws consumers, 2) the brand’s compelling narrative, 3) the store’s commitment to innovation and ROI, 4) its contribution to data-driven consumer engagement, and 5) its adoption of AI for forecasting trends.

The stakes are high, as each year sees the downfall of businesses and the eroding of entrepreneurial life savings due to poor planning. Investors and financial institutions lose billions. The challenge of raising capital is set to intensify, demanding a reimagined vision for retail. A proactive approach is to develop and validate operations in a digital omniverse before launching physical and e-commerce platforms. This approach allows businesses to refine their brands and strategies, bolstering their cases for funding and literally having tested their brand theories before they launch in the real world.

Inevitable change

As the retail sector stands on the cusp of change, it’s not a question of if, but how rapidly it can embrace the inevitable evolution. Integrating AI and digital twins isn’t a speculative future; it will be the reality for a resilient, thriving retail industry. Entrepreneurs must champion these technologies, pushing beyond conventional boundaries to innovate and lead.

Lenders will have little time to waste on untested ideas in a landscape where technology-first brands will overwhelmingly dominate. We must embrace a world where we can test risks and opportunities against the historical experiences of other brands within a digital twin of what we want to create in the physical world. Once launched, we can continue to test our theoretical strategies against all of our data within the confines of this digital lab.

The journey forward

The future beckons to those ready to rethink retailing, to imagine a symbiosis between brick-and-mortar and e-commerce as digital twins, where AI and data-driven insights craft superior consumer experiences. The journey forward is more than just embracing new technology; it’s about cultural adaptation, where agility, innovation, and consumer focus are at the heart of every strategy. As consumer behaviour trends towards voice assistance and personalized AI services, the signs of this paradigm shift are already surfacing. Technology-first brands can create instant videos for customers looking for specific products and prompt them with unique messages. This level of consumer engagement is unprecedented and will only proliferate going forward. If we were to invest our capital in the retail sector, it would be with those who are further ahead with delivering technology-first brands.

The future doesn’t just arrive; it’s shaped by visionaries who dare to redefine the retail experience.

Are we ready to join them?

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George Minakakis is the CEO of Inception Retail Group, author of three books, and keynote speaker.