Was Watson’s Win a Victory for Retail?

Watson, the Jeopardy-playing supercomputer built by IBM, bested show uber-champs Ken Jennings and Brad Rutter in February. But is Watson ready to take on retail?

Patricia Waldron, worldwide retail analytics leader for Big Blue, claims that Watson will soon enable merchants to achieve even greater understanding of their customers and make better, more accurate decisions based on that knowledge. It is breaking new ground by using sophisticated analytics to understand the meaning and context of human language. The technology behind Watson could be applied to retail in numerous ways:
• Responding with high accuracy to customer queries about specific products or combinations of products.

• Using seemingly unrelated bits of information – “My nephew likes Pokemon and skateboarding” – to generate gift ideas.

• Identifying hot future trends based on a wealth of information from disparate sources.

• Making more effective merchandising and promotion decisions down to item location and display type by tapping into high volumes of information about store flow.

Atul Jalan, CEO of Manthan Systems, says the lines between BI and artificial intelligence (AI) are blurring fast. “Future BI solutions will move away from today’s static and report-centric models to agile, intuitive and interactive solutions,” he says. “They will allow users to explore information freely rather than confining them to a predefined path of inquiry,” bringing analytics “closer to the natural human processes of inquiry.”

Still, retail experts believe the industry is years away from seeing this type of system in common use. Brian Kilcourse, managing partner with RSR Research, says “Forward thinking technology is an absolute necessity, and predictive intelligence will be important down the road, but we’re not there yet. Years ago retailers were using BI to figure out what happened yesterday. Now they’re trying to respond in real time. Predictive intelligence represents the future of BI, but you can’t ignore today’s reality to get to tomorrow’s promise.”

There’s another, more practical reason why Watson is not expected to turn up in the retailers’ IT hubs anytime soon: its enormous size. Watson runs on IBM’s new POWER7 architecture, and the requisite server blades are contained in what look like 10 refrigerator-sized racks.