At NRF Salesforce opens kimono
There’s been way too much obsessing about how AI and machine learning will eliminate jobs. In just one example, on Sunday January 13, 2019, 60 Minutes on CBS ran a feature about artificial intelligence venture capitalist Kai-Fu Lee, another one of many stories predicting the elimination of jobs and a dystopian takeover of the world (it seems) by machines.
Lee is a persuasive voice having been educated in the US but now residing and working in China. He’s also well published with titles on Amazon like, “AI Superpowers: China, Silicon Valley and the New World Order.” On 60 Minutes, Lee said that in 15-20 years 40 percent of our jobs would be “displaceable.” Being diplomatic and unwilling to buck Chinese policies he was unwilling to go all the way to saying the jobs would evaporate.
For the interview go here
But the reality of how AI and machine learning are and will continue to penetrate modern life is much more complicated than a Chicken Little reaction like, “The machines are coming!” To get the subtlety you might not be able to do better than pay check out Salesforce’s Commerce Cloud announcements from the National Retail Federation show in Manhattan this week.
What will surprise you is not that AI and ML are definitely making inroads into retail but, at the same time, they aren’t taking jobs away from humans. In retail, at least, machines are creating niches that only they can fill.
Here’s what I mean. There are lots of jobs in retail that could exist but they might add so much overhead that they’d eat up profits, also they could not be done timely i.e. in a few seconds within a transaction with a capricious customer. These functions form a niche that AI and ML fit nicely into. Back at the dawn of retail, vendors were product light, meaning there weren’t many choices. You bought in bulk or you bought cloth and not clothing, and, of course many product categories simply didn’t exist. Henry Ford’s famous dictum that customers could have a car in any color they wanted, “As long as it’s black” typified retail for many decades.
But today the situation is reversed. Amazon pioneered the infinite store shelf making it possible to carry ridiculous assortments and many retailers, even traditional brick and mortar ones, see no alternative but to follow. Their models have hybridized with options like buy on line but pick up and return in store—a software mediated work of art if you ask me.
Retail has gone through at least three iterations that can be summarized as, being assisted by a clerk, self-service, and now, being assisted by a machine. For example, the Einstein Recommendations API that Salesforce announced at NRF enables merchants to embed product recommendations in their ecommerce apps. Yes, the recommendations are based on what the machine knows about a customer, what they’ve bought, sizes and the like. Also, Einstein Visual Search enables users to send a picture through a merchant site to identify their product needs. In this the machine “sees” a picture and finds things that correlate. Who doesn’t want that?
Both of these services are human-ish jobs that improve the customer experience and ought to increase sales but that retailers can’t afford to supply. Nevertheless, tools like Einstein can easily provide such services at low cost and timely. And if you’re new to all this, Einstein is Salesforce’s AI functionality. To see the full press release go here.
To my way of thinking this is all confused with terms like customer experience but that’s what merchants are delivering with these AI and ML driven tools, an experience, and a good one. Imagine how seductive it is to want to purchase something and have the very item provided without the hassle of wrong size, wrong color, or wrong location.
But wait a minute, let’s also consider a situation in which the item is in stock but at another location and that it can be sent to you overnight. That would be thanks to the new Salesforce High-scale Inventory Availability Service. This platform service enables companies to see in store and fulfillment center inventory as one to facilitate sales.
My two bits
These and other products announced at NRF are either in beta or pilot meaning they have no prices yet. But it’s reasonable to expect that in nine months or so, in time for Dreamforce that is, these products will have their own place in price lists and cool demos on the main stage.
So to all the critics that worry about the decline of work for the masses and fret that we’ll need some form of universal basic income, wait a moment. The jobs being eliminated are either those that no one will want in the future or they’ll be machine generated services that were never considered for humans to begin with.
A century ago ocean-going passenger liners and cargo ships ran on steam power. Humans in the bowels of the ship literally shoveled coal into furnaces that made the steam. Less than 50 years later the laborers were gone. Ships still ran on steam but the furnaces were fired by oil that was mechanically fed to the burners. No one minded.
If Kai-Fu Lee is right and 40 percent of jobs could vanish in a couple decades let’s not fret. My research shows that such has happened 6 times since the Industrial Revolution and we’re at the end of number six. Disruptive innovation, what Schumpeter called creative destruction, has a way of back filling.