Transparent A.I: Why a multi-unit retailer needs to understand It

What Do Multi-Unit Retailers Need to Know about Transparent A.I.?

Artificial intelligence is taking a bigger and bigger step into our everyday lives – and most people don’t even know it.

Transparent (noun): Characterized by visibility or accessibility of information

A recent consumer survey conducted by Pega systems indicates that only about one-third of consumers think they use A.I. powered devices when the reality is that a majority of people are using A.I. for a variety of everyday tasks. Nearly three-fourths of consumers use A.I. powered tools to do everything from browse the web and shop online to play video games or even apply for a loan.

A.I. is intelligence demonstrated by machines, while machine learning uses algebraic techniques to give computer systems the ability to “learn” without being explicitly programmed. Instead of writing code, machines start with a generic algorithm that builds logic based on data inputs. The power of A.I. and machine learning is that they excel at analysis. While people would get quickly buried under a mountain of data and potential scenarios, machines thrive on more and more data. In fact, the more data and variables, the more accurate machine learning becomes at predictive analytics – the ability to forecast logical solutions or outcomes.

Man vs. machine: In the past, location intelligence relied on a handful of key variables. For restaurants, that usually included factors such as demographics, traffic counts, number of seats, available parking and whether or not the building had a drive thru. Frankly, those variables had to be kept manageable so as not to overwhelm the person running the analysis. Machines have a much bigger aptitude for digesting and analyzing large amounts of data. For example, an A.I. powered location intelligence platform like SiteZeus can conduct location and store analysis that include up to 50 different custom inputs from client data variables along with dozens of other metrics from third-party data sources. Combined, all of that information helps to further derive with a more accurate correlation between the variables and the sales forecast.

Transparency Translates to Trust

So, now that we’ve pulled back the curtain to reveal some of the basics of what A.I. is and how it works, what do we mean by transparent A.I., and why is it important? To achieve its full potential, A.I. needs to be trusted. We need to know what it is doing with our data, why and how it makes decisions when it comes to issues that affect our lives. This is often difficult to convey – particularly as what makes A.I. useful is its ability to draw connections and make inferences, which may not be obvious or may even seem counter-intuitive to us.

At SiteZeus, we understand that creating trust is more than just showing clients the bells and whistles of a really cool dashboard that can generate reports and heat maps with the touch of a button. It is important to show transparency and full disclosure on what factors contributed to those results. For example, the SiteZeus platform can predict that sales of a potential new location will be $500,000 with 88 percent certainty. The platform further provides an itemized list of variables, such as building type, square footage and proximity to competitors, that factor into that decision, as well as showing how much weight each of those variables carries in that decision.

Every multi-unit operator also has a few outliers in its portfolio of stores that may be outperforming or underperforming averages. The transparency of the SiteZeus systems not only identifies those outliers, but it helps to pinpoint the variables that are contributing to that strong or weak performance, which can help to increase relevant inputs and improve overall accuracy of the model.

Multi-unit operators also need to take that lesson on transparency to heart. The best A.I. algorithms are those that have access to quality big data sets. All companies like to hold their cards close to the vest. That doesn’t mean sharing data with the world – or with competitors, but it does require opening the vault a crack to input data into A.I. systems. SiteZeus offers tools, such as its Franchise Portal, to allow multi-unit operators to leverage a more powerful data set, while still protecting data privacy of individual franchisees. In the end, companies are recognizing that being transparent with their own data sets helps to achieve optimal results.

The Next Step: Creating Confidence

Once that trust is established and systems deliver proven results, the focus tends to shift to the results – and not the path of how those results were achieved.

Trusting technology doesn’t mean blindly believing in its results. Trust is built and maintained by many small correct actions over time. For example, people have organically grown to trust A.I. tools such as a Google search engine to find local restaurants. The fact that search results refresh when smart phone location settings are activated reinforces that trust. There is confidence in knowing that the GPS is influencing the search results and is offering the closest, best options within the search boundaries. SiteZeus uses transparency to create a detailed explanation for how a conclusion was reached, which helps brands to make more confident, data-driven decisions.

Relying on machines doesn’t mean eliminating the human touch. For example, people can use Microsoft Word as a tool for a variety of projects ranging from writing a novel to a grocery list, but it needs that human element to create a finished product. The same is true of location intelligence solutions.

Like any other tech-tool SiteZeus too needs human assistance to make the final decision. What invention of A.I. platform like SiteZeus has led to is better access to data processing and complex analysis that would lead in more confident decision making. Do you want to look at all of the viable locations in a market, or take a deep dive into what makes one location tick? Humans also can continue to enhance their inputs and data sets to update and improve sales forecasting models, while the transparent A.I. provided through the platform allows users to be much more confident in their decision making.