Repko, Melissa
CNBC.com
Posted 12/21/2023
Key words and Definitions
Change – to make something different.
Disruptive innovation – new ideas or products that radically change some business sector and often make the current product obsolete.
Artificial intelligence (AI) – the intelligence of machines and software that can often emulate human intelligence.
Summary: Key Points of the Article
A number of retailers are experimenting with generative artificial intelligence (AI) to bring technology to the forefront of shoppers' minds during the holiday season. Experts believe that AI will influence about "$194 billion in global holiday spending" this year. The software firm Salesforce tracks retail trends and stated that AI pushed $51 billion in sales during Cyber Week alone.
However, AI will be used much more behind the scenes as retailers use the tool to automate more tasks and free up time for employees to do more complex tasks. AI will work with customers, suggest items for them to peruse, and answer questions. Experts admit that the uses of AI are just now being explored.
AI is currently helping monitor and order inventory at Walmart, predicting store demand for various items, and coordinating shipping to make sure the products are in stock. Target is using AI to predict stockouts so it can order in advance. Nordstrom is using AI to find the fastest and most efficient product routes for online sales. By this time next year this fast moving field will be doing a lot more behind the scenes work.
News Topic
#08 Change and Innovation
Exercise 1 Multiple Choice Questions
- Double Stuf Oreos are an example of __________.
a. sustaining innovation
b. disruptive innovation
c. change
d. none of these
Answer: Double Stuf Oreos are an example of sustaining innovation because they help the firm maintain the status quo. Disruptive innovations are innovations that radically change the rules of the game or change the industry. Change is the process of making something different. - Which of these is an example of a disruptive innovation and the industry or established business that was affected by the disruption?
a. Apple iTunes and the compact disc
b. Newspaper classified advertising and Craigslist
c. Taxis and Uber
d. all of these
Answer: Note that all of these innovations either made the product almost obsolete (compact discs and newspaper classified ads), or forced substantial change (taxis). - Artificial Intelligence (AI) will likely be a disruptive innovation.
True
False
Answer: AI will change the way that most organizations conduct business and reshape the workforce needs.
Exercise 2 Critical Thinking Questions
- What type of tasks is AI being used for in retail?
Answer: AI is used to forecast product demands, maintain inventory levels, and determine the optimal shipping routes. It is also used to send consumers prompts about products they might be interested in buying. - How will AI impact labor needs in the future?
Answer: There is a big debate about how AI will affect labor demand. AI could replace many workers and push unemployment higher, or it could simply shift the skill sets that employers need and create more higher paying jobs. However, not everyone is capable of learning to do complex tasks so AI could displace lower income workers. - What impact will AI have on a firm's profitability?
Answer: AI will create even more efficiency and lower costs accordingly. This in turn will push profits higher. Depending on the impact the firm's labor needs the increase could be substantial.
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