Gilroy’s viewpoint: The launch of ChatGPT could be the most consequential invention this century and it could have a major impact on the wholesale industry

David Gilroy is the managing director of Store Excel

Your generation thinks it invented protest marching, long hair, free love, and heavy metal,” said my old music teacher, Mr Wilkins, after I told him the news that I had decided to drop the viola in favour of the electric guitar. He cranked it up another notch. “Black Sabbath and Led Zeppelin? Light weights. Tchaikovsky would blow them away. This is the genius who wrote cannon fire into the score of the 1812 Overture. Tchaikovsky, the giant who created panoramic soundscapes for 100-piece orchestras. Why so big? Power, volume and attitude. Imagine what he could have achieved with a stack of Marshall amps and a million gigawatts of electricity behind him.” Mr Wilkins was ex-military with honours – D-Day landings. He was passionate, he was formidable and, because it was 1970, he could assert his considerable physical presence. You didn’t disappoint him.

Taylor Swift is the greatest poet of the 21st century. It’s good to disrupt sometimes and I am sure that, like me, you’ve done this “greatest” thing at gatherings. Greatest ever: movie, female artist, album, author, James Bond (Sean Connery), footballer and so on.

The greatest-ever discovery or invention? There are options such as the combustion engine, crude oil production, petroleum or plastics technology.

One could also make a case for vaccines and immunology, which subsequently eradicated debilitating diseases such as smallpox and polio. This was enabled by another great discovery in the form of germ theory, which initiated diagnostic microbiology in medicine. However, this would not be possible without optical-lens expertise, which also gave rise to glasses, telescopes and microscopes.

The internet could also make a case for totally transforming the way we live today with personal computers, smartphones and broadband. But the thought of metallicising and plugging in Tchaikovsky with synths, guitars and amps is just too exciting. Anyone living in the late 19th century would be aware of electricity, but most would be amazed at how we rely on it today. Electricity is my choice as the most consequential discovery of all time.

That is until now – Frankenstein’s progeny has arrived in the form of artificial intelligence (AI). Regulate it, politicise it, promote it, oppose it, but you won’t deny it. It was defined by Russell and Norvig in 2021 as “a machine able to solve a wide variety of problems with the breadth and versatility of human intelligence”. Will it prove to be as impactful as electricity? Elon Musk has no doubt. “We are seeing the most disruptive force in history,” he said. Ian Cowie says that AI today is what steel was in 1856 when Sir Henry Bessemer invented a way to make steel stronger, more cheaply and quickly than previously possible. Steel was central to the production of railways, cars, planes and skyscrapers. Cowie reckons AI is the “Bessemer” moment for the “Famous Five” tech giants: Alphabet, Apple, Meta Platforms, Microsoft and YouTube.

Read more: Gilroy’s viewpoint: Customers are increasingly expecting their providers to demonstrate good ethical practices

The BBC reports that Microsoft attributes its 2023 accelerated sales growth to its AI tools. Microsoft’s chief executive, Satya Nadella, says that the company is applying AI “at scale”. Danny Forston, meanwhile, reckons the release of ChatGPT is a “big bang” moment. Capable of conversations, writing code, music, poetry, realistic images and producing multilingual swathes of copy. He reports that OpenAI is on track to bring in $2bn in annual sales in just 14 months after launching ChatGPT. As the potential of AI becomes better understood, there are serious concerns about the threat it poses. The International Monetary Fund (IMF) predicts that AI will have the ability to perform key tasks currently executed by humans thus lowering demand for labour and eradicating millions of jobs. Musk is more succinct. “Tech will make paid work redundant,” he said. There are also huge AI concerns around deep fake, cloning, copyright infringements, plagiarism and intellectual property theft. Hence the introduction of the new Institute of AI Safety and the inaugural safety summit in November 2023.

Nadella describes Siri, Alexa and Cortana as “dumb as rock” compared to AI potential. We have all experienced the limitations of the current generation of bots on service provider websites. GPT-4 takes this machine engagement to a far higher level. John Thornhill (Financial Times) states that these new generative AI models have endless possibilities.

AI in wholesale

For certain, AI will enter the wholesale sector. It will become integral for order placement, file management, customer file optimisation, delivery efficiencies, payment and credit control. Imagine machine-driven telesales where the difference between a human and machine is indiscernible. Wholesaler and supplier interfaces where AI offers both parties significant efficiencies. The heavy lifting of promotional scheduling, order placement and file updates will be undertaken by machines. It is not inconceivable that negotiations and joint-business planning will be streamlined by the deployment of AI machines. Machine-led deep analysis of product sales performance will provide management with the tools to objectively appraise SKU performance and space efficiency.

Wholesalers have a wealth of valuable customer data on their systems. To date relatively under-exploited. AI will enable wholesalers to gain a deep understanding of customer behaviours, patterns, trends and propensities highlighting the opportunities in the customer file. Identifying the important customers and those with the highest potential, offering true profit visibility and the insights for sales and margin improvements. AI machines will recommend marketing strategies to properly unlock the value in the customer base. AI marketing will provide the intelligence to determine which media work the best and at which times. Machines will supply the pre- and post-promotional analysis facilitating activation decisions and signposting the pathways to the best use of product investment.

At the checkouts, AI will take scanning and front-end service to a higher level. Expect AI-driven machines to significantly speed up throughput: scanning, invoicing and payment. Given the ability to search through records at speed, AI will seriously improve outstanding and overdue payments. Customer delivery efficiency will be enhanced by the application of AI: route planning, vehicle loading, product selection, and profit per vehicle and customer.

Site evaluation for warehouses and retail stores will be significantly improved by the application of AI. Given the ability to search through a myriad of variables, machines will be able to break open a location to offer real insights to management as to the best place to set up new units.

Launching new products is always high risk and the failure rate is high. Brand owners are already using AI-powered machines to trawl the social media sites for trends pertaining to consumer lifestyle preferences, tastes and product formulations to decide in which sectors to invest and build out on NPD. The likelihood of success is increased and the product launch de-risked. An evidence case is built to persuade retailers and wholesalers to commit early to NPD. AI offers manufacturers the cues for the advertising and marketing campaigns to ensure chances of success.

All service companies including wholesalers need to understand that AI has the potential to shift the balance of power between sellers and buyers in favour of the buyers. It is quite likely that meaningful price comparisons will be available on open source in the very near future. And through the ChatGPT app it is already possible to get service sector comparisons across a range of variables. This effectively neutralises price as a competitive advantage and places the emphasis on other loyalty and retention tools with service being the key component.

As Cowie says: “The digital revolution (AI) will create winners and losers, destroying millions of old jobs, but providing millions of new jobs and better services just like Bessemer steel did.” AI is already writing stories, poetry and music. I don’t know if Mr Wilkins or Tchaikovsky would approve, but it is going to happen, and soon.

Avatar photo
David Gilroy is the founder and managing director of Store Excel. He was previously the convenience retail lead at W2 Commercial and held operations director roles at Bestway Wholesale and Nurdin & Peacock.


This site uses Akismet to reduce spam. Learn how your comment data is processed.