5 minute read
Letter from America - Rick Derr
Toy tales: embracing AI magic for mall retailers
After 20 years working at A.C. Nielsen/D&B Research Company, Rick opened the first Learning Express Toys franchise in the Chicago area in 1996, and then became a sub-franchiser, opening nine more stores. Although leaving the corporate environment behind, he has combined his expertise in data and numbers with a passion for the toy retail space. Rick’s column this month looks at how, and if, AI can be of use to retailers.
This title is what ChatGPT gave me when I gave it several inputs, including what would be a good title for an article for small business toy retailers?
The first title output: ‘Unlocking Growth: How AI Can Revolutionize Small Businesses’ seemed a bit corporate, so I opted for a more fun title; after I added more input (prompts), it gave me a title I felt more comfortable with.
As an AI novice, I was reminded of 2008 when I first struggled to create our Learning Express Toys Facebook business page. What will it mean? How will it work? Do people respond and what content and frequency should we follow? And who will be the key person administering the page? Well, 16 years later, it’s still me!
I firmly believe businesses need to try new technology or tools in order to avoid falling behind or worse, going out of existence. Our introduction of Facebook, back in 2012, remains one of the top two events that has allowed us to not only stay in the toy business but to become a major player in the market. Running my first Facebook ad that December showed me this was a necessary step to compete against the giants and build our own audience of supporters. It was the right move - social media is now our dominant marketing strategy and has been for the last decade.
So, what is AI? The simulation of human intelligence processes by computer systems which comprises three processes: Learning (the acquisition of information and rules for using the information); Reasoning (using rules to reach approximate or definite conclusions) and Self-Correction. How can toy retailers begin to use these applications? In discussions with several folks that have used or are using AI today, I received three responses, ranging from “Get on it, and use it now!” to “It has some uses but not totally ready yet” to “Stay cautious and steer clear of it”.
Let’s first ask ChatGPT what are ‘Small Business Uses of AI’? The results were four areas that I will briefly touch upon based on my own limited use and how we run our toy shop today.
1. Predictive Analytics - AI can analyse historical data and predict future trends, help with inventory management, sales forecasting and risk assessments.
2. Marketing Optimization - analyse customer data to personalize marketing campaigns, predict trends and optimize marketing strategies for better engagement.
3. Customer Service Automation - chatbots can handle customer inquiries and provide support, improving response times and reducing workloads.
4. Cybersecurity -AI security solutions can detect and respond to potential threats in real-time, helping small businesses protect sensitive information and data breaches.
Of these four uses, I can see some potential uses locally with No. 1 and No. 2. Here’s how.
I search for new trends (within toys, gifts, sensory products, sales growths and declines, globally and domestically) and quickly collect data but AI can then rank and analyse it for me. Yes, you can Google much of this, but it is time consuming, and I would still need to upload and study the information. I also use AI for idea generation; when I start a project or a new endeavour, I ask AI to help me start to envision and fill in the blank canvas. This allows me to ask other questions and prompts as the project becomes clearer. While I have just begun to use AI for my marketing ideas, I can easily create a profile of a competitor’s customer and see how I might reach those for my business. I can also create images and ads with one or two prompts to save me time and stoke my curiosity. Need a new email format? Just ask and AI will provide examples.
The Toy Coach, Azhelle Wade, has spoken and lectured on this subject, including how to invent a toy and show renderings quickly. If you would like more info regarding AI in the toy industry, check out her podcasts or LinkedIn profile.
I also had a chance to ask two different 30-year-olds, in two different industries, how they might be using AI. I was surprised to hear their answers. An Online Gaming Industry Producer told me: “We have not largely used AI yet. Perhaps we redesign items or prototypes to see what might fit our game or analyse statistics of game players, but nothing in detail yet.” Meanwhile a Cybersecurity Consultant advised: “Stay away, or at least be very careful. If a company is using AI, we recommend a Closed AI model.“ Closed models prioritize data security and confidentiality, maintaining strict control over internal data access and usage to safeguard sensitive information. This distinction ensures a higher level of data privacy, particularly concerning personally identifiable or confidential data as opposed to Open AI.
Finally, I asked ChatGPT
‘Who is Richard P. Derr of LinkedIn?’ The response?
“I’m sorry, there is no widely known or notable individual named Richrd P. Derr.” So, I’m a nobody!
Until next time.
