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In the retail landscape, where efficiency and customer experience are key to staying competitive, smaller AI models are offering small and medium-sized businesses (SMBs) access to technology once monopolised by large corporations. Scott Dylan, a prominent figure in AI and technology investment, believes that these compact models represent a significant shift, providing SMBs with the tools needed to innovate and compete in areas like inventory management, customer service, and operational efficiency.
Scott Dylan emphasises how smaller AI models are creating a level playing field, particularly for SMBs that need to manage inventory and customer service effectively but lack the resources for the substantial infrastructure typically required by large-scale AI systems. With compact models, SMBs can forecast demand more accurately, streamline stock management, and enhance customer service with automation-driven responses. This new wave of AI technology equips smaller players with predictive capabilities that were once only feasible for giants like Amazon.
For example, smaller AI-driven chatbots now allow SMBs to engage with customers across various digital touchpoints, responding to inquiries, making product recommendations, and facilitating transactions. According to Dylan, “These AI tools provide the agility that SMBs need to thrive. They’re no longer stuck at a disadvantage in customer interaction or inventory management simply due to lack of resources. Instead, they can deliver a service level on par with larger competitors.” This agility, Dylan explains, empowers SMBs to meet customer expectations without the cost-intensive infrastructure that would otherwise be required.
Lower computing costs associated with smaller AI models are not only transforming SMB capabilities but also spurring innovation within traditional sectors like logistics, retail analytics, and supply chain management. Dylan points out that the affordability and efficiency of these AI models are enabling startups to tackle niche markets, previously underserved due to high operational barriers. From optimising last-mile delivery routes to developing predictive supply chain tools, AI-powered startups are addressing specific needs within the retail ecosystem.
By eliminating many of the infrastructure costs associated with large-scale AI, these models allow startups to enter the market with solutions that might otherwise have been prohibitively expensive to develop and deploy. “With smaller AI models,” Dylan observes, “we’re witnessing a new kind of innovation wave in sectors that have long been hampered by high entry barriers. The reduced cost allows for more experimentation and more targeted solutions, which in turn benefits the entire ecosystem”
As automation becomes more accessible, Scott Dylan predicts a reshaping of the workforce within retail and related sectors. The automation of routine tasks—whether in customer service or inventory management—means employees will need to focus on more value-added roles, overseeing AI systems and managing complex customer queries rather than handling repetitive tasks. This shift, according to Dylan, will require a recalibration of skills, with roles increasingly demanding technical acumen and data fluency.
In customer service, for example, AI chatbots are already handling many straightforward interactions, allowing human employees to manage more nuanced issues requiring empathy and specialised knowledge. Similarly, in warehousing and inventory, workers are now expected to understand data-driven insights that allow for better decision-making and resource allocation. “As these models continue to advance,” says Dylan, “we’ll see a workforce that’s more attuned to managing and optimising AI systems, creating a dynamic where technology and human skills complement rather than compete with each other”.
Scott Dylan underscores that the rise of smaller AI models represents more than just a technical innovation; it symbolises a shift towards inclusivity within the retail sector. By lowering barriers to advanced technology, these models empower businesses of all sizes to leverage data-driven insights, optimise their operations, and deliver superior customer experiences. For Dylan, this trend is a welcome evolution: “Technology should be an enabler, not a gatekeeper. Smaller AI models are ensuring that companies of every scale can benefit from advancements that might otherwise be out of reach.”
As the retail industry continues to evolve, it’s clear that these smaller, efficient AI models will play a critical role in shaping a more equitable and innovative business landscape. For the startups, SMBs, and retailers ready to embrace this shift, the opportunity to enhance operational capabilities and customer satisfaction has never been greater.