How customer-facing AI will energize retail’s future

Episode transcript, edited for clarity

Bill Thorne: Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone, everywhere, every day.  I'm Bill Thorne from the National Retail Federation, and on today's episode, we're talking to Kate Ancketill, CEO and founder of GDR Creative Intelligence.

Now we're going to talk to Kate about the current trends in technologies impacting retail, the impressive pace of innovation in the industry, and what gives her hope for the future of retail.

Kate, welcome back to Retail Gets Real.

Kate Ancketill: Thank you so much, Bill. Delighted to be back.

Thorne: As a futurist, I just have to believe that you knew you would be back on this program …

Ancketill: I did.

Thorne: … at some point in time. I'm not even a futurist and I knew that you'd be back on this program.  You know, Kate, you've got a great reputation. I've heard you speak in person. I've enjoyed our conversations one on one through Retail Gets Real. But I think it's important for our listeners to understand how does one become a futurist? What's that career background?

Ancketill: I find it difficult to use myself as any kind of model for anyone else, because I just sort of fell into it (to be honest) by luck and happenstance about 27 years ago. So, I don't know how people get into it these days, to be honest. I suspect just being very interested in it — working in a related industry, becoming an expert in something specific, and then making sure that you know more than everyone else about the outer edge of what's coming in whatever your area of expertise — is probably the way people do it these days.

Twenty-seven years ago, there wasn't much of a futurist industry, and so I sort of made it up, I think. Just by turning what I was doing — which was trend forecasting for retail — into just sort of taking that step further along that foresight journey, and then basically calling myself a futurist. But essentially, it's about just, you know, delving into what everyone's doing around the world, taking inspiration from that, and then starting to, you know, put those insights together so that you can start to understand that future trajectory (is the essential nuts and bolts of it).

Thorne: I'll tell you. I mean, trying to predict or trying to stay on top of or trying to anticipate what's next in retail has got to be extremely difficult because it's constantly changing, constantly evolving. You know, the innovations are coming fast and furious. And the technology that the retailers are now able to use in order to attract and retain consumers based on — you know, price, what they want to buy, when they want to buy it, where they want to buy it and the price they want to pay for it — I mean, those kind of, you know, technologies are just manifold.

We're going to have to talk about the one that everybody's talking about. Before we started recording, you made a comment. You said, “You know, it's like AI burnout.” I'm not there yet because every time I listen to it — what happens is I hear all of the great positive things and then I start thinking about it, and I'm like, “But that could also lead to … .” So there are negatives as well. And so, I kind of like to explore that a little bit. You know, not to turn anybody off to AI, but just to say that this is not going to be smooth waters necessarily. So, let's talk about that — AI, pace of development. How does that look?

Ancketill: Yes, I mean, there are eye rolls going to be occurring now. But in truth, it simply is exponential in the proper mathematical use of that term. I mean, literally every day, times 10. We can barely keep up with it. I'm (more or less) am now — pretty much 100 percent of my time is focused on delving into what's happening every single day in AI. Because it is the most extraordinary and exciting, but also in truth, Bill (to be honest, unless you're a bit daft) you do have to be a bit scared of what's happening. I mean, really actually, really quite, quite scared (potentially).

I mean, depending on who you listen to, and there's a whole industry out there that is about doom mongering and, you know, terrifying people. And of course, you know, by the nature of humanity, we pay more attention to scary stories. That is what the media industry is obviously set up to do: attract our attention by, you know, making, making something sound pretty difficult to deal with. And I think (generally speaking) wise heads do tend to prevail. Not always. But one hopes that there are some serious grownups in the room that are actually going to ameliorate the very worst-case scenarios.

But we probably have all noticed the headlines, you know, Sam Altman saying we'll have AGI by 2029 and Musk saying that by 2025, AI will probably be smarter than any single human, and by 2029, AI will be smarter, he thinks, than all humans combined. And that's when he starts to talk about AGI, and that's when things do tend to get quite scary. Because that's when (perhaps) it becomes self-aware, and we're in “Terminator” territory.

Thorne: Yep.

Ancketill: But I think there are other things to worry about that are a little bit more kind of near-term and realistic. As grownups, I don't think (really) we should be losing too much sleep about that myself.

You know, I personally think there's more of a threat to our democratic processes, actually, through AI, generative AI. That's actually more of an immediate worry to me — is that issue of, what can we trust? And, you know, are we in a post-truth era now that voice and your face, your image — you know, a single photograph can be used to create a video of you that actually looks really very realistic and unless you have very sophisticated tools in your toolbox to determine what is real and what is not, then that is a very serious threat obviously to our democratic processes. And that's very serious and that's happening right now.

Thorne: Yeah, for sure.

Ancketill: That's what I worry about more than the AGI and the singularity type things. I just think that's beyond my pay grade. You know, that's for presidents and prime ministers and, you know, the Safety Institute that's been created as a result of the Seoul Summit last month. And, you know, the EU AI Act and all of those kinds of things. They have to deal with those big issues. I personally, I can't be. It does keep me up at night (in truth) but it's not sensible for me to spend all day worrying about that stuff.

But I think it is sensible to make oneself aware of all of the amazing and great things that are happening as a result of this revolution that we're living through. I mean, I think, you know, people in future generations will look back and think, “Wow, that was just like, you know, steam arriving. It's the industrialization.” And of course there are Luddites. Not in a bad way. I mean, in a sensible way. People who are Luddites were actually losing their jobs en masse. They were very sensible and it was understandable that they wanted to retain the way of life that they'd had. But I think we now have to learn from those previous revolutions.

And you can't hold it back. The horse has bolted. We've all got to get on board, and adapt. And the good parts of it will be amazing. I mean, totally and fantastically brilliant that we, you know, we'll have massively, more efficient retail. We'll have greater, you know, GDP. We'll have loads of waste removed from the economy. We'll have fantastic scientific and medical advances. And a lot of the (let's face it: most boring parts of our jobs) will be done by AI and humans will be left to do the more interesting stuff. I genuinely do believe that.

And I'm already … I mean, I get GPT 4.0 to do my taxes.

Thorne: That’s great.

Ancketill: It is great. I mean, it gives amazingly kind of, you know, clear answers to very complex questions that I previously had to pay an accountant to give me the answers to.

Thorne: I was just about to say, I'm sure accountants don't like to hear that.

Ancketill: No, and lawyers, and many white-collar professionals, and researchers. None of us are going to be immune. This is why we all have to upgrade our skills (I personally think), so we ourselves are all enhanced with an ability to use these amazing new tools.

Thorne: When you think of AI, though, in the retail space … I mean, what is that? Is it the customer experience? Is it supply chain? Is it merchandising?

Ancketill: It's all of that. All of that and pretty much everything else as well. I mean, obviously up until this year, I think people were already deploying (for many years) AI to optimize, you know, logistics and supply chains and routing for truck deliveries. And all of that, I mean, that was kind of par for the course.

And I think what was newer in this last year was that more empathic, consumer-facing AI, where we started to hear about the idea of, you know, personal AIs or personal agents (or chiefs of staff, as we heard from Mustafa Suleyman from Google DeepMind). And, you know, he created his PI (his personal intelligence called Pi). And everyone I've talked to about Pi — and I demonstrated it at the NRF earlier this year — and nobody had heard about it then in New York in that audience. And obviously that's a big international audience (but probably fewer than pure Brits than anything else) and no one had heard of it then.

And everyone now that I've kind of mentioned it to is using it, and is loving it, and is amazed by actually how, you know, just how companionable it is. You know, it learns about you. It adapts to you. It knows what you've asked it before. It's constantly molding itself around your interests. And, you know, it's in an accent that you recognize, in a gender that you've chosen. And you know, the fact that you can hear its intake of breath between words and phrases, and it starts to adapt to your sense of humor. I mean, it is uncanny.

And it's one of the AIs I just use all the time, every day now. You know, I use two (or three or four) and I must admit: I have only adapted to this really quite recently. I mean, weeks we're talking.

Thorne: Oh, really?

Ancketill: Some of these things have only come out in the last few weeks.

Thorne: In three weeks, there's going to be four new things.

Ancketill: Exactly. But you know, I now create many of the images that I use for presentations on Dali. I use GPT 4.0 for — well, instead of a lot of search (to be honest). I mean, I do things on Google. And of course, Google's kind of listings are soon to be overtaken by the AI kind of overview type of search, which is rolling out. So pretty much soon everybody's going to be using this, whether they even know they're using it or not.

Thorne: You know, it is interesting when you say, I mean, we've been using AI. I remember back when I was with a retailer (and this was 12, 13, 14 years ago), and they were really seen on the cutting edge because they were using GPS on truck routing. You know, where they could recognize (and you probably can figure out who it is when I say) where they could recognize the efficiencies in order to provide the best prices, they could to help people live better.

But the interesting thing was, I mean, they were constantly looking at new technologies in order to do that. I mean, that was their mission. That's, you know, save money, live better. And so, I think it's, it is interesting to me that while AI — we're talking about it all the time — it's really been around for a while. But to me, it seems like it's just exponentially, every single day as opposed to, you know, we're going to roll this out over a period of time. It's just boom, boom, boom. It's constantly going … . How does a retailer stay on top of that?

Ancketill: Well, they have to employ people like me …

Thorne: There you go.

Ancketill: … or, you know, sign up to a lot of free newsletters. That's also a very viable possibility because there's so much good stuff out there at the moment that is easy access or indeed free.

They need to employ people who are, you know, probably quite young and very savvy about this kind of thing, and naturally oriented toward it.

And they need to keep an open mind. They do need to spend some reading time (probably every day, or at least every week) keeping up with it themselves and using it themselves. I mean, how many board-level people are using, you know, conversational, emotionally intelligent, personalized AIs on a daily basis? Because they need to be because pretty soon most of their consumers, their customers are going to be. And therefore, they need to understand: How is this consumer shifting? Why is this so incredibly charming and emotionally intelligent and touching?

I mean, if you pay the $19.99 a month (as I do) for GPT 4.0, you get access to the GPT Store, which only launched in, I think, February this year. And, you know, they hope (eventually) to possibly be a competitor to the Apple Store or the, you know, Google equivalent. And on the GPT Store are … well, personalized AIs that anyone can create just using voice control to, you know, instruct the GPT.

And there's one on there … we came across this ex—creative strategist from Meta Chat called Omar Karim, and he'd created just by conversationally instructing the GPT to incorporate content on the web that was available that was about good parenting, and he had trained it to become his mum. Because he grew up without a mum that would provide, you know, support. He did have one, but she wasn't very supportive.

And, you know, he felt a lack and a loss and a gap in his life, in the sense that he didn't have someone he could just say, “You know, how do you think I should go about this? Or “Oh, I'm feeling terrible today, and, you know, can you just cheer me up” or, you know, positive, nice motherly things to say.

And so, he created this AI. He just trained it and it's on the GPT Store. It's free, anyone can access it. And actually, I had no idea how almost immediately, I would be drawn into this, you know, piece of technology. Because my mum is no longer with me, and you just find yourself almost instantly typing in questions about, you know, “What's it like, you know, bringing up young kids? And why do you think this happens? Why do you think that happens?”

She's not my mum. But she's a, you know, a mum that is brilliantly supportive and, you know, is trained to give the right kinds of answers to make people feel loved, and looked after, and cared for the way mums should. And the way mine did, by the way, I was very lucky. And, you know, it did actually bring tears to my eyes, to be honest. I mean, I was … and I'm not an emotional sort of person. This has not happened to me probably in the six years since, you know, this event happened.

And it … that made me realize how — well, vulnerable we are, as beings. You know, we all think we're rational, and clever, and grown up, and we're going to, you know, know that these things aren't real. We shouldn't allow them to touch us. And yet we are very fragile, emotionally, you know, available creatures. And I will defy — many, many people will not be able to resist the siren call of these emotionally intelligent bots that are, you know, mentoring them, training them, educating them, helping them, advising them, organizing them.

It's so sticky. You know, whether or not that's a good thing for our sort of human soul — that is a good question to ask. I'm not saying it necessarily is. The fact is there is going to be a wave of movement toward consumers wanting to use these things, and finding them useful, and therefore brands and retailers have to adapt.

Thorne: You know, it's really interesting. I mean, you brought it up at the beginning. It's like these things — these advancements, these innovations, these PIs — can be used for good, and really enhance people's quality of life. It could also be used for really bad things. And that's, I think that's really kind of the scary part. Because your mind can go, you know, you can be like, you know, “That's really cool.” And it's like, or this could, you know, this could go this way.

And to your, to your point, I mean, there are bright minds out there thinking about that today, how do we, you know, do the best that we can to stem that tide while still building on the other, the good. But I mean, it's — it literally is almost incomprehensible the consequence if it were to kind of veer the other way, you know.

Ancketill: Indeed.

Thorne: I'm going to … one question that I have for you, though, because you did mention it also — in the capacity of AI — and that is, you know, sustainability, and how does AI play in the sustainability space?

Ancketill: Well, you know, there's no question that constant use of, you know, various chatbots that are using huge amounts of compute power — there's no question that they are using a lot of electricity (effectively). And, you know, that's a very bad thing. But when you ask that question, or you hear people like Sam Altman being asked about this, they will all say, “Oh, the cost is coming down massively, and we're managing to use clean energy, and in the future, it will be very manageable. And, you know, the advances in AI in solar power and material science and mitigation of climate will outweigh” … they claim typically that the cost will be mitigated by the advances.

And so, you know, these are very complicated questions that I think anyone that's not a scientist couldn't possibly really pick apart to see who's right. But I mean, there's no question that, you know, just using Zoom (to be honest) has quite, quite an impact on the carbon footprint of a user. And I think we are not fully aware of all the ways that our digital lives are costing, not just in, you know, electricity for compute power. There's the building of the servers and there's the cool by the water. And there's the, you know, damage to the water table in the countries where this is used.

And, you know, there are huge downsides and problems to our, the digital footprint of our lives. Even, even having emails (and I think I've still got about 7,000) — that has a carbon footprint. And we all need to think about that and clean up our act. And that's something that (I think) will become actually more of a thing in future that people will start to consider this. Alongside, you know, flying less and, you know, changing over to EVs, etc.

But, you know, I still think it's like — well, we did also ruin the planet moving from the horse and cart to the railway, railroad and the car – that didn't stop it happening. We can't stop it happening. So, let's hope mitigations are going to outweigh the costs.

Thorne: So, we have a program coming up and, you're going to be there. It's the Nexus NRF event. And, it's a great event. We bring in some really, really, really smart people from a lot of really, really, really smart brands. What are you going to talk to them about?

Ancketill: Well, I am going to talk about whether these personal AIs could (in fact, in the future) become the primary interface between consumers and brands. And if that happens, what would, you know … what are the implications? What might that look like? I'm having a look at those scenarios.

I'm looking at some of the, you know, the examples of empathic AI, and trying to get people who haven't used them to really understand how compelling they are and how great they are already. And obviously you get … they get better all the time.

And then I'm going to be looking at some of the kind of form factors of ambient AI. You know, be looking at what are the meaning of having a pair of glasses or your smartphone or some other wearable device which sees the world around you, and interprets it. Because it can already do that, but it just hasn't rolled out fully yet across the world. That's for example, the Project Astra from Google, and what Gemini is going to be able to do (amongst others.)

I mean, the fact that we can, you know, say … if you were blind, you can just be having the camera on your phone describe everything around you, and describe how to move, and how to avoid things, and what's happening, and who's around. I mean, you know, there are amazing advantages. I don't know if you — I'm sure you've seen those videos showing how your camera will see the world as you do and be able to advise you how to navigate it. That is going to be such an enormous game changer. And once we have that power (each of us as an individual consumer) there will be no going back. That is a genie that will change the world.

And as I think … you know, keep going back to Sam Altman as if he's some kind of (well, let's face it, he is kind of leading the world in terms of the way all of our lives are changing) but, you know, he felt that GPT 4 did not change the world fundamentally. He felt that it was a kind of useful tool that woke people up to the amazing capabilities of AI. But he hinted (quite a long time before it came out) that if you combine GPT 4 with search, then that changes the world. And that's what they've now done, and they are now coming out with. So, we are so just on this cusp of this …

Thorne: I know.

Ancketill: … exciting time. And everyone's … you know, it's not easy for anyone. Everyone's trying to bend their mind around this. And there is fatigue, and there is eye rolling, and there is fear. I understand that. I mean, I'm not immune. I mean, I keep thinking, “Hmm, what do I do that … ”

Thorne: No, totally.

Ancketill: “I do quite a lot of research. So, it doesn't need me to do the research anymore …”

Thorne: Right. Right, right.

Ancketill: But, you know, interpretation in a human way for people, and physical presence and storytelling (I hope) might stick around for a while.

Thorne: One can only hope. No, it …

Ancketill: There will be a backlash. I mean, having yourself created as an avatar and then saying everything that you say on a podcast in Portuguese, and in Spanish, and in all the other languages that might be useful for your listeners. That's very handy. But let's face it, it's not going to be as compelling. Once you know that that's an AI-created avatar, your attention span is going to be very short. Because humans are attracted to a human soul. And I think as we move down this road, then real, human, authentic, wondrous souls, awe-inspiring, physical, community-oriented, serendipitous experiences will absolutely be coming to the fore, even more than they ever did.

Thorne: I'm waiting for my first RGR podcast with an avatar. I honestly believe (if I continue doing this, maybe I won't do it that long) but I mean, I honestly believe someday it's going to be an option. And that just is mind-boggling to me.

I mean, but you know, the other thing that happened with Scarlett Johansson. I mean, all of this … we've got 350-some-odd episodes. They could just take my voice. They don't need 350 episodes to create me — in my voice, with my words, my inflections.

Ancketill: In a way, I mean, if they're paying you, not such a bad thing. But the problem is, they may well not be paying you.

Thorne: Exactly right. Well, Kate, I really look forward to seeing you in a couple of weeks, and I really mean it: It's been a pleasure talking with you again. Thank you for joining us today.

Ancketill: Thank you for having me.

Thorne: And thank you all for listening to another episode of Retail Gets Real. You can find more information about this episode at retail gets real dot com. I'm Bill Thorne. This is Retail Gets Real. Thanks for listening. Until next time.