Insights from Retail’s Big Show: Day 3
FSW recaps a session on AI, supply chain, and how to make luxury more sustainable and optimized.
The exhibit floor at the National Retail Federation Big Show feels like the physical manifestation of the Gartner Hype Cycle about artificial intelligence (AI).
From our perspective, half the “AI-powered solutions” on offer are poorly disguised natural language or machine learning technologies that have been around for years. This is not necessarily a bad thing, as there are a variety of useful technologies out there.
However, there is a difference between AI and generative AI. There is also a difference between contextualized, brand-appropriate AI applications tailored to specific business use cases and what is basically AI for AI’s sake.
That said, it is undeniable that AI is transforming retail and that many brands are woefully unprepared for what’s to come, both operationally and philosophically. AI solutions can offer fashion and luxury brands, in particular, a variety of ways to streamline and optimize everything from inventory management to personalized customer experiences.
The conference session we found the most compelling from the final day of NRF was a discussion between Guido Mengoni, Marketing and Advisory Director of Temera, and Marco Ruffa, the former Chief Marketing Officer at Pinko. In this session, they discussed AI’s impact on fashion, with Pinko’s innovative use of AI as a focused case study.
Italian technology company Temera provides IoT solutions like RFID for retail, fashion, and luxury brands, largely in Italy, France, and the UK. Since its inception in 2009, the firm has been working to bring traceability to the industry. This expertise is obviously useful given that brands must now comply with the new EU regulations over digital product passports, a mandate designed to reduce overproduction and overconsumption. “Fashion is the second most polluting industry in the world,” Mengoni noted.
Like most NRF sessions, the focus of this discussion was an informational case study of Pinko’s application of Temera’s solutions, rather than a sales pitch. During the session, Mengoni honed in on the interconnected approach of Temera’s software for supply chains and how it helps brands address the inefficiencies of the traditional distribution models. Where in current models production often exceeds demand, Mengoni explained that Temera has been able to “simulate a reduction of 20-30% in production to move towards liquid production—frictionless and adaptive to real-time market needs.”
While no one realistically expects luxury CEOs to shift focus from sales to sustainability, this session nonetheless underscored how sustainability is becoming more of a priority for C-suite executives as consumer consumption patterns and preferences evolve, particularly for more sustainability-conscious Gen Z shoppers. Ruffa quipped, “Have we reached the pinnacle [of consumption]?” Both speakers in this session reiterated that luxury brands now need to focus on optimizing production, using AI tools and applications to forecast demand, reduce waste, and align with consumer values.
As Mengoni commented, this generation of supply chain AI tools is about enabling brands to “place the right product in the right location at the right time for the right customer.” For brands, the manifold benefits outweigh the pains of transformation: reduced working capital, minimized overproduction, fewer store leftovers, and improved ESG metrics.
Regarding Pinko’s specific use of Temera’s technologies, Ruffa talked at length about how the brand integrated AI into its operations across different facets of the business through what he called the "Pinko Brain." This strategic framework included various use cases for predictive and generative AI to improve and optimize corporate decision-making and customer engagement.
One interesting part of the discussion concerned change management and how to bridge the tech adoption gap for inexperienced users unfamiliar with new tech and possibly even unwilling to try it. In addition to extensive training, Ruffo noted that they used pre-suggested questions to help situate and guide users who were uncomfortable with prompt writing.
When discussing where to get started with AI, both Mengoni and Ruffa stressed the value of flexibility and agility for digital transformation. “Try fast, fail fast,” Ruffa noted, highlighting the iterative process Pinko used to refine and optimize its AI systems. The brand also took advantage of generative AI’s ability to build on existing models, enabling faster, more measurable implementation and results.
Mengoni and Ruffa underscore the use of AI as a tool to solve specific business problems within a well-defined strategic framework. Temera’s integrated traceability systems and the AI “Pinko Brain” demonstrate how AI in the right context can drive both operational efficiency and sustainability.
“AI is all about the approach,” Ruffa commented. “You need to have discussions between teams about goals to decide how to reach them.”