In the fast-paced and data-driven world of retail, artificial intelligence (AI) has emerged as a transformative force, enabling retailers to enrich their product data and thereby enhance customer experiences, optimize sales, and unlock growth opportunities.
Yet for all the hype and excitement, some warranted and some not, it’s essential that retail CIOs and CTOs leverage AI effectively—whether to build an in-house solution, buy off-the-shelf AI software, or partner with retail-specific vertical AI specialists. According to Gartner, strategically choosing between these three options can significantly influence organizational success, with wise decisions facilitating progress and unwise ones leading to delays and lost revenue.
In this blog, we’ll explore the age-old “build versus buy” dilemma many retailers face, and make the case for why partnering with specialists to augment your existing technology investments is the smartest choice for your business’ bottom line.
Building AI For Your Retail Business:
Building an in-house AI solution might seem appealing as it can be tailored to your specific retail business’ needs. However, this approach comes with various challenges and drawbacks, which include:
- Time and resource-intensive: Hiring and assembling a skilled AI team, scoping, designing, building, and testing the product is a lengthy and resource-intensive process.
- Diversion from core functions: Retail tech resources may be diverted from core business functions like designing, producing, and selling products, hindering growth and innovation.
- Lack of expertise: Retailers might not have AI as their core competency, making it difficult to maintain a competitive edge in this rapidly evolving domain.
- Uncertain ROI: Investing in building AI internally carries the risk of not guaranteeing a return on investment.
- Limited support: Building in-house AI lacks the support of a dedicated customer and technology team with implementation, onboarding, and optimization experience.
Buying AI For Your Retail Business:
The second option is to purchase off-the-shelf AI software to expedite the process and bring AI capabilities to your retail business quickly. While buying AI for retail has some advantages, there are also drawbacks to consider. On the positive side, buying AI software can save time compared to building from scratch, allowing for faster implementation.
However, buying off-the-shelf AI poses challenges as well:
- Limited customization: Pre-packaged AI solutions may not be fully customizable to your unique business requirements, limiting their effectiveness.
- Integration challenges: Some AI software might require replacing existing systems, leading to integration complexities and a fundamental lack of interoperability.
- Lack of domain expertise: Generic AI solutions may not be optimized for the retail domain, potentially reducing their overall impact on your business.
Augmenting Existing Technology with Solutions Like Lily AI:
Augmenting AI refers to the process of enhancing or supplementing existing artificial intelligence capabilities with specialized external resources or technologies. Instead of building an AI solution from scratch or relying solely on off-the-shelf solutions, retail organizations can choose to augment their existing technology suite by collaborating with external AI specialists like Lily AI. We embrace a MACH Alliance composable commerce approach, emphasizing partnerships and integrations. This enables retailers to craft optimal technology solutions for their business, leveraging the strengths of each platform to deliver the best possible experience for consumers. This strategy also allows retailers and brands to capitalize on the expertise and innovations of dedicated AI specialists to complement and extend their existing AI functionalities, ultimately leading to more robust and tailored AI solutions that address specific needs more effectively. By augmenting AI, companies can accelerate their AI initiatives, improve performance, and stay at the forefront of technological advancements without expending excessive time and resources on internal development.
Among the three options, augmenting your business’ technology with interoperable and customizable solutions offers the most compelling advantages for the following reasons:
- Rapid ROI: Lily AI specializes in solving retail-specific challenges, ensuring a swift return on investment through improved product data and customer-centric product attribution.
- Speed to market: Partnering with Lily AI enables you to launch AI capabilities faster than building in-house, gaining a competitive advantage in the market.
- Seamless integration: Lily AI’s solution can seamlessly integrate into your existing tech stack, eliminating the need for disruptive “rip and replace” processes.
- Tailored to your business: Lily AI customizes its solution to align perfectly with your retail needs, providing personalized and accurate insights for your business.
The Bottom Line: AI Is Essential
While building in-house and buying off-the-shelf AI solutions are common approaches, they come with challenges that may hinder your ability to grow and innovate. However, as retail leaders, the decision to leverage AI is essential for staying competitive in today’s fast-paced market. According to venture capitalist, Andreessen Horowitz, “The stakes here are high. The opportunities are profound. AI is quite possibly the most important – and best – thing our civilization has ever created, certainly on par with electricity and microchips, and probably beyond those.”
Learn More About Augmenting With Lily AI
Augmenting your retail technology suite with vertical AI from Lily AI ensures a swift ROI, enables faster implementation, and offers a tailored solution that seamlessly integrates into your existing tech stack. With Lily AI, you can achieve improved product data via customer-centric product attribution, empowering your business to deliver personalized experiences that delight your customers and drive long-term success.
Contact us to learn more about how you can stay at the forefront of the industry with cutting-edge AI technology.