New York in January isn’t the warmest place in the world, but as it’s playing host once again to the National Retail Federation trade show, that’s an issue that Salesforce CEO Marc Benioff has had to deal with over the past couple of days, as he noted in a keynote session at the event:
Obviously I am freezing my ass off here in New York because I live in Hawaii most of the time. So coming here is a shock for me.
The solution lay, appropriately enough given the theme of the conference, in a bit of retail therapy courtesy of a visit to the Lora Piana store on Madison Avenue, a trip that provided Benioff with a useful exemplar of the potential power of tech to deliver a better customer experience. After providing the store assistant with his name and address, he was handed a jacket and told to try it on:
They put this jacket on me and I said, 'Wow, this is exactly what I wanted'. They knew me. They knew everything about me. They saw me on their website, they saw me in their store here at Madison Avenue, and they knew me. They also knew that I was just in Tokyo two weeks ago, and I bought a sweater from them [there]. I walked into the store on Madison Avenue, and they knew I [had been] there. I think they knew I was gonna buy this jacket before I bought it. And I think that that's customer centricity.
Lora Piana is one of the high end brands for luxury retail conglomerate LVMH Group, a long-standing Salesforce customer. Another such customer at the same end of the market is Gucci, part of Kering Group, also cited by Benioff as a prime example of how generative AI, probably the most prevalent topic of discussion at this week’s NRF gig, can be successfully applied to retail:
I went out to Milan and [Gucci has] a call center with about 300 agents, pretty incredible people, and they're using generative AI for the first time…Something really cool happened. We saw that with Gucci, all of a sudden, when we apply generative AI to their call center and their contact center, that their revenues went up 30% - and it happened almost overnight.
What happened was, it was an augmentation of the executives...they have taken this whole incredible group and taken them to another level with generative AI. The way they did it was, they were already using our Service Cloud through Kering all over the world. By applying generative AI, those agents who are strictly service all of a sudden have a lot more knowledge about all the products. When customers are talking to them about product issues they're having, the system is able to augment those agents and make them better.
This is crucial when retailers are considering deploying generative AI, he advised, noting that:
I think the leaders were kind of thinking they're going to get a lot of productivity out of that, maybe they're not going to need as many agents from [using] it. Maybe they don't really know what to think of what's happening here, but [they feel they] have to try it out.
But there’s a simple thing to bear in mind, according to Benioff:
Think about it just a little bit. If AI is not making us better and augmenting us, we've lost the plot. Yes, we're gonna get more productivity; yes, we're going to get better customer relationships; yes, we're going to get higher margins - all those things are very important to us. But I would say that if it's not improving us, or improving the state of the world, we're kind of losing the plot around what AI can really ultimately do for us.
Magic Kingdom collaboration
Away from the luxury end of the retail sector, Benioff also pointed to to Disneyland as a useful exemplar. He’s a massive Star Wars fan and a self-professed “Disney fanboy”. Disney is also a fan of Salesforce, using it in its Disney Stores, to support its Disney+ streaming platform and, of course, inside the Magic Kingdom itself.
Visitors to Disneyland - Benioff reckons to have been there four times over the past year - can be met by Disney Guides, who take you around the various attractions, get you into restaurants, make sure you don’t have to stand in line for rides for quite as long as you might otherwise etc etc.
Again, ensuring that these guides know all about the customer and the customer’s interests is paramount to making the experience as satisfying as possible, including being up-to-speed on whether there are issues with rides that mean it would be better to stop off at another attraction en route so as to avoid disappointment. Collaboration tech is key here to this "exciting retail environment", said Benioff:
If you're with the Disney Guides, you'll see they have a phone with them now. They know me. They have my system of record. They have everything about me, the tour, what I've bought. They also have another product, Slack, and they have the ability to collaborate and talk to each other in real time…The powerful part about Slack for the Disney Guides, combined with our system of record, with Salesforce, is not only do they know me, but they're improving my experience by collaborating with each other. Collaboration is a key part of the future.
And it also comes back again to AI, he added:
Now inside Slack is generative AI...giving you a daily review of everything that's happening, or 'Hey, I know you're going to be doing this tour with Marc, you're going to want to hit these three things, because these are the things that he loves to do'. They're going to know that I'm going to want to definitely go to that Disney Star Wars ride because that's my very favourite thing to do. And if there is a bump in the road on that, they're going to want to know, 'Oh, hey, we're going to pause over here’.
As noted, AI is everywhere at NRF this week, which is hardly going to surprise anyone. Benioff noted:
AI is a long term cycle that has been going on for decades. We all know that, this idea that we've had all kinds of Machine Intelligence, Machine Learning, and predictive capability now really for decades. But generative is definitely new, this idea that we are able to expand these deep learning models, and take this kind of word model, or Large Language Model, and get it to do these kinds of very cool party tricks. You know, say these things or draw this picture or do this or do that and all of a sudden, it's like, 'Wow, I'm really able to do some amazing things with this technology'. We are in a new moment in AI.
His host for the keynote session, John Furner, CEO of Walmart US, another longstanding Salesforce customer, concurred:
Many times there are cycles, where there's hype and then there's reality. This one feels a bit different the last 12 to 15 months.
As dignomica noted last week during the CES 2024 show in Las Vegas, Walmart got ahead of the noise at NRF this week by outlining its own AI thinking. What struck me from Furner at NRF were his comments in support of Benioff’s ‘augmentation’ argument around AI. Picking up on the call center empowerment at Gucci, he argued:
For the people working in that center, they've got to feel better about their ability to satisfy customers. No-one comes in and hopes that we just get through the day, or we're just average,; we want to be the best we can be and these products are making us better. And for a lot of us that have spent years trying to figure out product catalogues and attributes and how to structure that data in the right way, it feels like we've hit a point where this technology can learn and move fast without a lot of the rebuild that perhaps you may have been talking about a few years now. We have to rewire our organizations, and we have to think about this differently, but you don't have to go rebuild everything, which I think is quite a bit of an enabler for all of us.
Overall, a commendably pragmatic session to close off NRF day one. (And that Lora Piana jacket’s bound to come in handy in Davos this week, Benioff’s next destination!)