For episode 5 of Retail Power Talks, we hosted Amnah Ajmal from Mastercard. Amnah is the Group Executive for Merchants & Commerce, Digital Partnerships & Fintechs, Public Sector, Strategy, and M&A at Mastercard. With over two decades of experience at the forefront of banking, payments, and technology, she brings a wealth of knowledge and a passion for driving transformative change.

We discussed one of the most talked-about topics in the business world: the power of AI to redefine retail. From enhancing customer experiences to revolutionizing operations, AI is reshaping how retailers engage with consumers.

Q: You’ve had an illustrious career in banking and technology. Can you share a bit about your journey and how you came to focus on AI and retail?

A: Among the many segments I oversee, retail is a key focus and a particularly important one, especially in the diverse markets of the GCC region. Here, we see a significant shift towards a "phygital" experience — blending physical stores with the rapid growth of e-commerce.

It’s been a fascinating journey because my clients are keen on leveraging new technologies to not only expand their market share but also create entirely new markets. For instance, consumers who traditionally only shopped in stores now increasingly prefer e-commerce. The challenge then becomes: how do you replicate the in-store experience in an online environment?

Reflecting on my career, I remember a time when contactless payments struggled to gain traction. In fact, I recall a newspaper headline predicting that contactless payments had a long road ahead in the region. Fast forward to today, and we’ve surpassed cards altogether — many consumers now rely solely on their phones for transactions. The pace of customer adoption has been remarkable, and retailers have embraced this shift enthusiastically.

Q: Personalization is a key trend in retail. How can AI help retailers create more personalized and engaging customer experiences? Have you come across AI tools like Retail GPT? How can they enhance these experiences?

A: Personalization has always been a challenge, particularly in physical stores. When I walk into a store, the sales assistant typically has little information about me. In contrast, online platforms have access to my data, purchase history, and preferences, allowing for a highly tailored experience.

However, AI has enabled retailers to bridge this gap. Today, many retailers use AI to provide personalized experiences even in physical stores. This technology recognizes that consumer journeys are often non-linear. I might start browsing on my phone, switch to my laptop, and complete the purchase in a physical store — or vice versa. AI helps retailers connect these touchpoints for a seamless experience.

Take the cosmetics industry, for example. Sephora was among the first to leverage augmented reality, allowing customers to virtually try on makeup. L’Oreal also introduced an AI diagnostic tool that analyzes skin tone and suggests the best foundation match. Instead of spending time in-store testing products, consumers can confidently purchase products online. Similarly, AI-powered virtual try-on tools for hair color are revolutionizing how people experiment with new looks. It’s these kinds of practical applications that demonstrate AI’s true power in enhancing customer experiences.

Q: Can you provide some examples of how AI can improve inventory management, demand forecasting, and supply chain efficiency?

A: Demand forecasting is an excellent example of AI's impact. A major Turkish retailer expanded to the GCC region and faced a learning curve due to differences in consumer behavior. They used AI-powered analytics to track customer searches and quickly realized a unique market insight — customers in the GCC were searching for larger product sizes to accommodate larger family units.

This real-time feedback allowed them to adjust their inventory and supply chain strategy almost instantly. Instead of relying on traditional, time-consuming market research, AI provided actionable insights that informed their product lineup.

Another example involved seasonal trends. In Turkey, summer is brief, so beachwear sales peak in July. However, in the GCC, summer lasts much longer. The retailer noticed that consumers were still searching for beachwear in November. Thanks to AI, they adapted their inventory to meet this unexpected demand.

These cases highlight how AI and machine learning provide invaluable real-time insights that empower retailers to make faster, more informed decisions. In a region with diverse markets, this agility is a major competitive advantage. By incorporating AI into demand forecasting and supply chain management, retailers can respond to consumer needs more effectively and efficiently.

Q: While AI offers numerous benefits, there are also some challenges in its implementation. What are some of the key challenges retailers face while adopting AI, and How can they overcome them?

A: There are many challenges, but I would highlight two key ones. The first challenge is not exclusive to retailers but is common across the industry. Many firms that weren’t established in the last three or four years often have legacy infrastructure.

AI requires large amounts of data, but that data needs to be in a standardized format. Legacy systems often store data in fragmented silos, making it difficult to harness AI effectively. These infrastructures were not designed to support AI applications. Historically, human data scientists mined data manually, which was time-consuming and inefficient. AI can accelerate this process, but it requires consistent and complete data to generate meaningful insights. Transitioning from fragmented systems can be costly and may involve extensive reengineering. In some cases, companies might need to collaborate with fintech providers to bridge the gap and standardize their data.

The second challenge is more about mindset than technology. I firmly believe that mindset adoption is the most critical aspect of any major change. When the internet first emerged, many people resisted it, fearing it would negatively impact society. Similarly, when mobile phones were introduced, surveys in the U.S. showed people preferred landlines, and early mobile phone adoption was slow.

Human nature often resists change, especially when there are concerns about job security. Employees may worry that AI will replace their roles. Leaders must address this internal resistance and foster a culture of collaboration and learning. Additionally, customer concerns about AI also need to be managed. While Gen Z consumers often embrace technology, others may worry about data privacy and the reliability of automated processes, especially for tasks like product returns. Building trust through transparency and providing seamless customer experiences will be essential.

Q: Ethical considerations have become increasingly important with the rise of AI. How can retailers ensure their use of AI is ethical and respects customer privacy?

A: One of the most concerning ethical issues with AI is gender bias. AI systems rely on historical data, which often reflects human biases. Since AI is designed by humans for humans, it can inadvertently perpetuate those biases.

There have been cases where AI algorithms offered electronic discounts primarily to male shoppers while recommending higher prices to female shoppers based on purchase history. Similarly, women who purchased fitness equipment were often recommended beauty products instead of performance gear, reinforcing outdated stereotypes. On the other hand, men who bought baby products were not recommended additional parenting items, as parenting is often incorrectly assumed to be a woman’s role.

To prevent these biases, human oversight is crucial. AI outputs must be reviewed before deployment to ensure fairness. When people talk about AI eliminating jobs, what they often overlook is the importance of upskilling. Human intelligence is vital to complement AI and ensure responsible implementation. Leaders must be accountable for the ethical use of AI and take proactive steps to identify and mitigate biases.

Q: Finally, what would you say is the significance of events like the Saudi Retail Show for the retail industry?

A: Events like the Saudi Retail Show are invaluable for bringing industry leaders together under one roof. They provide a platform for exchanging ideas, sharing best practices, and learning from one another. These events are especially beneficial because they connect established players with emerging startups and fintech companies.

Large companies often seek agility and innovation, while smaller players are looking for scale. Events like these facilitate collaboration, enabling both sides to leverage their strengths. In the future, innovation won’t come solely from individual companies. It will require partnerships between large retailers, fintech firms, and other industry stakeholders.

Additionally, these events offer a fresh perspective. Stepping away from day-to-day operations and engaging in industry discussions can spark new ideas and inspire actionable insights. I always leave these gatherings energized and ready to explore new opportunities.

While AI presents incredible opportunities for retailers, its successful adoption requires overcoming challenges related to legacy infrastructure and mindset shifts. Ethical considerations, particularly regarding biases and data privacy, must remain a top priority. Events like the Saudi Retail Show play a significant role in fostering collaboration and innovation, encouraging leaders to exchange insights and collectively shape the future of retail. By embracing AI responsibly and proactively addressing challenges, retailers can unlock new levels of efficiency, personalization, and customer satisfaction.

These insights highlight the immense potential and challenges that accompany AI adoption in the retail industry. While technological advancements pave the way for innovation, success ultimately hinges on addressing legacy infrastructure, fostering an adaptive mindset, and ensuring ethical considerations. Retailers must embrace collaboration, transparency, and a customer-centric approach to truly harness AI's power while building trust and driving sustainable growth.