When the internet became big and viable for businesses both Macy’s and Amazon used it –just a different ways. Macy’s created a portal for people to shop at their store, while Amazon created a completely new business model of shopping. While Macy’s had retail stores and therefore employees to pay, rent to pay and lights to keep on Amazon had none of this worry about.
As a result Amazon could save money and offer a broad range of products.
This is because Amazon uses the internet as its foundation while Macy’s does not. Fortunately the internet is not going anywhere so Amazon is here to stay!
Fast forward to present day and there are plenty of companies with only online platforms. However companies are wrestling with the same problem as the past but with a different technology, Artificial intelligence.
Here’s how a company works. It makes products or designs services i.e. business operations. The business then it offers these products and services to their customers who pay for it. The company also gathers data about a bunch of other things like products customers operations metrics and pretty much anything else that they plan to use or use. Now let’s have a look at Macy’s and Amazon’s in the new world of AI technology.
If Macy’s were to use AI that’s how they could probably insert AI on the customer side to offer things like chatbots, use AI in their business processes for improvement or use it in their data to make predictions.
On the other hand the new Amazon empowered by AI would fundamentally look different to Macy’s as like the internet for Amazon, AI for Amazon will be used at its foundation.
So what are some of the possibilities? Let’s have a look:
Currently AI can recognize objects in images. It can model complex rules with data sets and can also process large amounts of data to find underlying patterns.
An AI Amazon empowered could use AI for these tasks, and in some cases AI would replace the roles of some employees and in other cases it would simplify existing processes.
Let’s look at another example. Those of us who drive all pay car insurance and the premium we pay is proportional to the risk. As such it’s likely that if we live in a bad neighborhood we pay more.
One company could specialize in risk; they could gather data from multiple sources such as credit agencies, crime reporting agencies, weather report companies, people data and others in order to compute a risk score on you and your car. This company could use AI to digest all this data and create models just like how companies can check the credit history of a person please companies can offer risk scores course to other companies.
Now risk is only one part of insurance; what about quoting, billing, payments and insurance claims?
Now imagine that multiple companies sprout up and each one specializes in one part of a whole process. This is a completely new business model with each company having a specific role to play in this big ecosystem. Perhaps another AI company could simply orchestrate the connections among the new companies providing an end-to-end experience for the customer who doesn’t really need to know what’s behind the scene.
Having companies working together in such a fashion produces very serious competition. If your company’s business model is outdated it simply can’t complete like Macy’s who’s having a tough time against Amazon. It’s got little to do with the people at Amazon being too smart or working harder; it really boils down to the business model, this is what makes difference!
Hope this helps…