“AI has the potential to revolutionise the way retailers operate,” says Theo Paphitis
Posted on in Business News
Former Dragon Theo Paphitis has predicted retail will be revolutionised by AI technology.
According to Office for National Statistics (ONS) data, retail sales in the United Kingdom have averaged a 2.13% year-on-year growth between 1997 and 2023. In contrast, the AI sector is forecast to grow by 35.9% between 2019 and 2025.
Quoted in startups.co.uk, Paphitis believes AI will help the sector tap into new horizons of possibilities.
“AI has the potential to revolutionise the way retailers operate,” says Paphitis.
“From personalised recommendations to inventory management and customer service, it has the potential to transform both the online and offline shopping experience.”
Consumer ecommerce now accounts for 30% of the total retail market in the UK and 82% of the UK population bought at least one product online in 2021. AI could therefore be key in continuing to digitise the retail industry.
As Paphitis explains, “retail has always been seen as a ‘traditional’ industry but with AI, that perception is bound to change.”
Numerous brands in the UK are already attesting to that transformation. Amazon Go stores have made cashiers obsolete, as customers can simply walk in, pick up their items, walk out, and be charged later on their Amazon account. Japanese clothing brand Uniqlo is similarly exploring new retail frontiers. Using AI-powered UMood kiosks, customers have their reactions to different colours and styles measured by the technology. Personalised recommendations are then used to match them with the perfect product.
However, Paphitis observes that AI is not a new technology for retailers.
“Retail has actually been an adopter of many early forms of AI,” he explains, “having been used to help with pricing strategies and customer behaviour analytics to name but a few examples, so retail will continue to be at the forefront of implementing it.”
“AI will impact the business world as a whole”.
Whilst it’s a nearly undeniable fact that AI will be normalised in business, the role of small businesses in the technology’s revolution isn’t as clear cut.
According to data from the Department of Science, Innovation, and Technology (DSIT), 88% of the business population of AI is composed of small businesses and start-ups. Nevertheless, 71% of all UK AI revenues (£7.6bn) are generated by large firms.
This indicates the risk aversion that investors sometimes have towards smaller businesses, as they’d rather have a sure bet in the form of larger, more established enterprises.
To foster the growth of smaller businesses, Theo Paphitis launched the #SBS Invest opportunity earlier this month, which is a game-changing investment source for SMEs.
As the leader of Small Business Sunday (#SBS), Paphitis has extended funding opportunities for previous winners of the scheme.
One or more small businesses could receive an investment of at least £50,000 and up to a maximum of £250,000 from investors for a percentage of equity in their business, subject to the terms of the deal negotiated. Besides the investment, businesses will also have the chance to be offered membership in an expansive network of more than 3,750 small enterprises.
“It’s certainly challenging times out there for SMEs at the moment, and that’s why this is the perfect time to launch this opportunity,” explains Paphitis.
Winners of the #SBS Invest opportunity will be publicly announced at the annual #SBSEvent in February 2024, which regularly oversees over 1,000 pioneering small businesses from all over the UK in attendance.