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Terminator vs. Iron Man: Machine Learning’s Emerging Impact on Retail & CPG Roles

I read an amazing piece in the NY Times last December on the “Great AI Awakening” In it, the author describes how Google Translate, the company’s language translation service, had made more progress over 9 months with machine learning algorithms than with a decade’s worth of hard work under previous approaches.

It’s a tremendously exciting time in Silicon Valley. Everywhere up and down Sand Hill Road, the machine learning transformation has gripped investors and inspired startups to do things differently.

Here at Eversight, we’re no different—machine learning has made a huge difference in the value we deliver our customers and will remain a significant investment area on our product roadmap. AI, for example, enables us to identify a number of new promotional offers for retailers and CPGs to test, out of the thousands or millions of permutations of offer type, discount depth, images, ad copy, etc. This is important because yesterday’s A/B testing is simply too slow and unstructured, and it relies on a human to decide what to test. AI enables the machine to coach or suggest to the sales leader what to focus on. But what makes this even more important is that the machine, of course, gets better the more that anyone uses it.

There are predictions coming from all sides about the radical level of disruption that this is going to cause in the retail and CPG industry. Our investors over at Emergence Capital cite a figure from the Oxford Martin Programme on the Impacts of Future Technology that estimates 47% of jobs are at high risk of automation and among them, Sales and Merchandising roles are some of the most likely to be affected.

The immediate (and justifiable) knee-jerk reaction for a lot of people is to worry that The Terminator is going to take away their job. But that’s not how our investors or our team sees it. We think these innovations are going to make sweeping changes to the way that we work as a society, and especially how sales and merchandising leaders work, but the likely solution is more like Iron Man than The Terminator.

What do I mean? The next generation of software is going to transform the way we work, yes, but it won’t make jobs obsolete…it will be more of an expert coach to help humans make better decisions. And retailers and CPG manufacturers will be a primary beneficiary of these radical improvements.

An analog that Jim White (our board member from Sutter Hill) uses is the world of Chess. Once Deep Blue defeated Gary Kasparov in 1997 the world was convinced that they days of humans were numbered… the machines had arrived and they were smarter than us. Today, the best chess being played isn’t by a computer… it’s a computer paired up with a person, who also consults a team for a better opinion, a form known as Freestyle Chess.

Rather than the Terminator, expect to see more software like that coming from us and others soon… coaching capabilities that empower salespeople and merchants to make better decisions. The “next generation” I mentioned above is now. The days of Iron Man are upon us.