Dive Brief:
- Wayfair expanded its partnership with Google Cloud after seeing workforce efficiency improvements and operational cost savings, the companies said Sunday.
- The retailer plans to deploy Google Workspace to thousands of employees and leverage Gemini models on Vertex AI. Wayfair has already found boosts in employee productivity by using Gems, or customized versions of Gemini, according to the announcement.
- The retailer expects to see six-figure annual savings by automating tedious tasks, such as manual attribute tagging, the companies said. Gemini will also improve listing quality and accuracy of product attributes, supporting improved customer experiences, Wayfair said.
Dive Insight:
Wayfair is doubling down on AI in the wake of rocky financial performance. The retailer is at an elevated risk of bankruptcy this year, according to CreditRiskMonitor. Weak demand has pushed revenues down and led to store closures and layoffs.
Wayfair is hoping technology upgrades, especially those that lead to quick returns, will fuel cost savings.
“We’ve been a large adopter of machine learning, data science for a very long time,” CEO Niraj Shah said during an earnings call in November. The company considers itself an aggressive adopter of generative AI as well.
Using the technology to automate product and attribute tagging, as an example, comes at an insignificant cost but drives value, Shah said. The company has also worked on developing copilot-style tools for its software development team to increase productivity. Another area of focus is empowering customer service agents.
“We believe [generative] AI is the key to unlocking the next generation of retail experiences,” Wayfair CTO Fiona Tan said in the announcement. “With Google Cloud, we’ve been able to efficiently scale and enrich our product catalogs, enabling us to support a more seamless and engaging shopping experience for our customers.”
Customers are turning to AI, too. More than half of holiday shoppers said they already use the technology or planned to use it during the season, according to a Perfect Corp. survey published last month. Salesforce predicted AI would drive around $200 billion in holiday sales.
While most consumers welcomed the technology during holiday shopping, concerns persist. Analysts recommend organizations lean on transparency to build trust.
