Radical Reads

Want AI with that? How AI is transforming retail

By Ryan Shannon, Investor


Image Source: iStock and Candy Illustrations

The financial services sector has led the way in AI adoption over the last decade as businesses look to better understand their customers and create more personalized banking experiences. Today, those technological innovations are reshaping consumer experiences across a growing number of sectors; and, on the back of a surge in commerce, retail is set to overtake banking in AI spending. Projections expect the global retail sector to spend nearly $12 billion on AI this year, growing 25% annually over the next three years.

Retailers are leaning on AI solutions to improve business operations. Home Depot, Etsy, and Wayfair, amongst many others, are leveraging machine learning-enabled computer vision and recommendation algorithms to improve inventory management and introduce a broader range of products to existing customers. After successfully adopting AI to improve internal business operations, companies are increasingly experimenting with AI in the ‘front of the house’ to enhance the buying process and to provide a personalized customer experience while staying attuned to consumer priorities around preserving privacy.

In the coming years, we expect to see a renaissance in how businesses think about recommendation engines. While this core AI technology serves as the backbone of consumer-facing social media services such as TikTok, recommendation engines are becoming increasingly important to retailers, particularly in a post-cookie world. This is technology near and dear to us: Layer 6, the AI company founded by Radical founders Jordan Jacobs and Tomi Poutanen, built a world-leading deep learning recommendation engine. We will share our perspective on how innovations in recommendation algorithms can solve the “cold-start problem” and preserve consumer privacy in an upcoming issue of Radical Reads.

Editor’s Note:

Today marks the 100th edition of Radical Reads!  🎉

We want to thank our readers as we head into our third year of sharing Radical Thinking about the transformative power of AI. Over this time, AI has seen many developments, including quantum breakthroughslarge model creation, and material applications in pressing areas such as healthcare and climate change. We have welcomed many guests who we thank for contributing their thoughts and sometimes voices, including Geoffrey Hinton, Alison Gopnik, Eric Schmidt, Fei-Fei Li, Pieter Abeel, Eric Topol and our partners in the global AI ecosystem. We look forward to bringing the latest insights and news from the most transformative technology of our time directly to your inbox every week. As always, we encourage you to share Radical Reads with friends and colleagues!

AI News This Week

  • English schools turn to AI to help students catch up after Covid  (The Financial Times – subscription required)

    A London-based primary school is now using an AI-based system to get students back on track after a year of pandemic disruptions. The AI enables students to self-direct their learning, spending less time waiting for their peers and more time pushing their understanding. Teachers are also gaining from better data on their classroom, and learning students’ study habits in weeks rather than months. Overall, platforms that assess pupils and guide teachers are becoming mainstream as education becomes increasingly digitized.

  • A machine-learning algorithm to target COVID testing of travellers  (Nature)

    Greece has implemented a machine-learning algorithm for targeted SARS-CoV-2 testing. The application demonstrates the value of prediction machines. A Greek research team trained an algorithm to allocate fewer tests by learning which passengers are likely to test positive. Despite difficulties applying machine learning to issues around the pandemic early in its trajectory, the reinforcement learning algorithm has markedly increased the efficiency of testing and contributed to Greece’s ability to keep its borders open safely. Read the full paper.

  • Scientists use AI to create drug regime for rare form of brain cancer in children  (The Guardian)

    Scientists have successfully used AI to create a new drug regime for children with a deadly form of brain cancer that has not seen survival rates improve for more than half a century. AI has enabled a drug combination to be identified, which likely has promise as a future treatment for some children. It may be one of the first examples of a treatment proposed by AI to benefit patients. News of this breakthrough comes the same week the first AI-based pathology product received FDA de novo authorization, enabling its use for in vitro diagnostic testing.

  • 2021 has broken the record for zero-day hacking attacks  (MIT Technology Review)

    Cybersecurity defenders have caught the highest number of zero-day attacks this year. These exploits are a way to launch a cyberattack via a previously unknown vulnerability. They are just about the most valuable thing a hacker can possess (carrying price tags north of US$1 million on the open market). At least 66 zero-days have been found in use this year. These attacks are difficult to catch as most strategies depend on understanding the pattern of previous attacks. By developing baselines, minor anomalies can be detected across millions of machines and then traced back to the zero-day attack. AI in the cybersecurity market is expected to be worth $38.2 billion by 2026, with a CAGR of 23.3%.

  • New ten-year plan to make the UK a global AI superpower  (Government of the United Kingdom)

    The UK released a 10-year AI plan to help it become a global “artificial intelligence superpower.” The National Artificial Intelligence Strategy aims to attract AI talent and firms and invest in AI advancements. Unlike the EU’s proposed rules on AI, it does not outline how to regulate the technology but plans to put forward regulatory rules on AI in early 2022. Until then, the UK government is taking a minimalist approach when it comes to AI.

Radical Reads is edited by Leah Morris (Senior Director, Velocity Program, Radical Ventures).