Starbucks India, Pernod Ricard: AI's Long-Term Power
Retail executives from Starbucks India, Pernod Ricard, and Omni Talk caution against AI hype while showcasing its practical impact on supply chain, marketing, and operations, with Starbucks India using computer vision to track queue times and Pernod Ricard leveraging AI for marketing mix modeling.
- 1Starbucks India uses computer vision to track customer behavior, including queue times, demonstrating AI's immediate impact on operational efficiency in physical retail environments.
- 2Pernod Ricard employs AI for marketing mix modeling to optimize budget allocation and an AI-powered application to streamline product catalog management for distributors, highlighting AI's role in driving measurable business outcomes.
- 3Retailers face a build vs. buy dilemma for AI solutions; while Kunst from Cleo Capital suggests buying, Gupta from Starbucks India advocates for in-house development for core competencies, and Calloc'h recommends exploring open-source options.
AI's current impact and hype
Retail industry executives explored AI's role, with panelists Chris Walton of Omni Talk, Pierre-Yves Calloc'h from Pernod Ricard, Vipin Gupta of Starbucks India, and Sarah Kunst of Cleo Capital discussing its impact.
AI: Hype vs. Reality
Gupta argued AI is "highly overhyped," citing the gap between potential use cases and actual implementation and the need for organizations to build proper data, infrastructure, and change management foundations. Kunst suggested existing AI applications in areas like supply chain are "under-hyped," while generative AI may be "overhyped." Calloc'h shared Pernod Ricard's AI-powered application that streamlines product catalog management for distributors, emphasizing finding use cases with measurable business impact.
Diverse AI applications in retail and CPG
Computer Vision for operations
Gupta highlighted Starbucks India's use of computer vision to track customer behavior, measuring metrics like queue times. Calloc'h mentioned Pernod Ricard's application of computer vision for safety compliance in production facilities.
Content generation and brand identity
Kunst warned that AI-generated content can sometimes feel "flat." Calloc'h countered that AI tools are enhancing human creativity in marketing.
Optimizing marketing spend
Calloc'h shared how Pernod Ricard leverages AI for marketing mix modeling, enabling more precise budget allocation and improved marketing effectiveness.
Delivering personalized experiences
Gupta detailed Starbucks India's efforts to deliver personalized experiences through AI, including tailored app messages and product recommendations.
Streamlining back office tasks
Calloc'h emphasized AI's potential in streamlining back-office operations, particularly in data normalization and invoice processing, advising a measured implementation approach.
Strategic considerations for AI adoption
Build vs. Buy solutions
Kunst advocated for buying solutions in most cases. Gupta countered that building in-house can be more effective for companies like Starbucks. Calloc'h highlighted open-source solutions as a middle ground.
As AI evolves, retail and CPG companies face both opportunities and challenges. Success will depend on careful strategy, robust infrastructure, and a willingness to experiment and adapt.
