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How Generative AI Can Help Small and Medium-Sized Businesses Succeed

Retail is one of the top industries adopting generative AI today. Ninety-eight percent of retailers, both large and small, plan to invest in generative AI tools in the next 18 months, according to a recent survey conducted by NVIDIA.

Generative AI (GenAI) is a type of artificial intelligence that specializes in creating or generating content, like text, images or audio. It can be used for creative tasks, personalization, automation and more. 

But GenAI isn’t just for large businesses. It can be even more valuable for small- and medium-sized businesses, which use this nascent tech to achieve more with fewer resources: to automate tasks, improve customer experiences and identify new growth opportunities. 

According to a 2023 Techaisle survey, incorporating GenAI tools has become a top priority for 53% of small businesses. And 93% of small business owners agree that AI tools drive savings and improve profitability.

But GenAI can do a lot more for small- and medium-sized retailers than just create simple marketing materials. McKinsey estimates the potential impact of GenAI at $400 billion to $660 billion a year as it may touch all aspects of running a business. 

Creative Content 

Many small businesses aren’t aware of how powerful GenAI can be for creating visual content. Companies such as Adobe, Canva, Microsoft Designer and Shutterstock all now offer generative AI tools to edit images, create graphics and generate videos. This means retailers have a wider variety of resources available to create impactful ads. 

The GenAI program Midjourney generates content—images or copy—from typed prompts. DALL-E, a tool within OpenAI’s ChatGPT, offers similar capabilities for its subscribed users. And Getty Images recently announced the launch of Generative AI by iStock, an affordable generative AI tool to help businesses turn their creative visions into images – using Getty’s library of millions of exclusive photos, illustrations and videos.

Another impressive tool was created by the advertising startup Adthos. Its new AI platform can transform an image into a complete audio commercial. Adthos clients upload a product photo, billboard, or any other brand image to the company’s platform, and the generative AI model will use it to write a draft script and select appropriate voiceovers, music and even sound effects. 

Data Analytics

GenAI is especially skilled at processing and sorting through data. Small businesses are using AI-driven predictive analytics to forecast trends, understand consumer behaviors, and optimize inventory management (predicting demand patterns and suggesting reorder quantities). 

AI tools like Upmetrics help startups write business plans. Established retailers use AI to summarize online reviews or to help with supply chain management, to predict potential bottlenecks. They’re utilizing AI to help generate new product ideas based on customer purchases, surveys, demographics, and market trends. And they’re using financial forecasting tools to generate forecasts for revenue, expenses and profitability. 

Retailers are also outsourcing their AI data analytics even further. The Toronto-based company Retalon, for example, builds AI to help retailers optimize their businesses – from creating financial plans, managing inventory, optimizing prices and aiding with fulfillment. 

Customer Experience

According to a McKinsey report, GenAI can help retailers respond more quickly and efficiently to customer needs. McKinsey’s analysis “estimates generative AI could contribute roughly $310 billion in additional value for the retail industry (including auto dealerships) by boosting performance in functions such as marketing and customer interactions.”

GenAI can analyze customer data to generate personalized product recommendations, emails and advertisements for a more tailored shopping experience. Chatbots and virtual assistants can provide 24/7 customer assistance, which is important for late-night online shoppers. Conversica is one AI-powered chat solution that integrates with multiple tools commonly used in retail, such as Hubspot, Marketo and Salesforce.

These tools also aid smaller retailers in expanding globally, by translating languages, product descriptions and chats. And they help companies create a more diverse experience for customers. For example, fashion brands are using tools like Lalaland, which dresses avatars of various body sizes so customers can see how clothing may fit on them before they decide to purchase. 

Generative AI is truly transformational for retailers of all sizes. Small retailers don’t have to be marketers, social media experts, photographers, customer service agents or writers and financial planners all at the same time. AI tools empower entrepreneurs and small businesses to focus on what they do best—all at an affordable cost.