The commercial applications of artificial intelligence have been much lauded. However so far only a small fraction of companies have implemented AI-based technology for their business. According to Gartner’s 2018 CIO Agenda Survey, only 4% of CIOs have added AI functionalities, with 46% having plans to do so in the near future. This is surprising: According to the IDC, the adoption of AI will drive worldwide revenue to more than $47 billion in 2020. That’s a financial gain from which early adopters of AI technology will benefit the most.
Early Adopters: High Risk, High Reward
Choosing to invest in new technology can be risky business. Sometimes it’s difficult to distinguish if a particular new service or tool is the next big thing or just a lot of hype. Afraid to make the wrong move, many companies hesitate, waiting first to see what others are doing in that space. But for those who take a gamble, the rewards are quite tangible.
There is a lot to win from being an early adopter. But there’s also a lot to lose by waiting too long. Avoiding the risk of leading the industry can bring about the so called “laggard penalty”, which has been projected to reach about $692 million from 2015 to 2018. Even if companies don’t fall into the 10% of laggards, belonging to the late majority can have negative effects on the image of a company. Customers value brands that are on the forefront of technology, because it signals that they understand what consumers want.
Fashion Companies Who Are Investing in Tech
When it comes to adopting new technology, the fashion industry tends to fall into the late majority category. However, there are a few standout companies who are investing heavily in innovative shopping features.
Indian eCommerce site Myntra developed Rapid, an AI-based process that speeds up and completely automates clothing manufacture by analyzing sales and identifying best selling attributes, then using automated machines to produce these items. Brands like Zara have launched Augmented Reality apps to add an extra digital layer to the in-store shopping experience. Gucci created VR-enabled scannable ads and shop windows that allowed customers to shop the latest collection from their mobile phone. Tommy Hilfiger recently staged a VR-enhanced fashion show, in which showgoers could use their phones to immediately purchase items from the collection. And recently Nike partnered with Snapchat for a prerelease of the Air Jordan III sneaker. Using the AR enabled Snapcode feature allowed young Snap users to shop by scanning an image.
Especially in the AI-powered image recognition industry, the benefits for fashion brands and retailers can be quite significant. By 2021, early adopter brands that redesign their websites to support visual and voice search will increase digital commerce revenue by 30%. The two biggest e-tailers in Europe, Zalando and Asos, have both already implemented visual search into their shopping apps.
From its humble beginnings in a Berlin apartment, Zalando has grown to a € 4.5 billion business by making innovation an important part of their company. Not only were they one of the first fashion retailers to offer visual search in their mobile shopping app, they also host their very own Innovation Lab. Similarly, Asos has been hailed one of the most innovative fashion companies. They had a massive PR push after announcing the launch of their visual search tool in the summer of 2017. At the Poq App Commerce event a few weeks ago, Andrea Trocino, Director of Technology at Asos, also announced their planned investment in voice search technology. He stressed the importance for fashion companies to have the basics right before experimenting with innovative things like voice and image search.
Benefits of Being an Early Adopter
Next to press attention and the financial boost, there are a few other benefits of being an early adopter.
- Help Develop the Product:
As one of the first to test a product, companies play a part in developing the product and have a say in the growth of a product.
- Bragging Rights:
Early adopters also get bragging rights and can say they offered a certain technology long before anyone else did.
- Thought Leadership:
Early adopters equal thought leadership. Innovation requires someone to be first, so why not be the one who does it?