Bonus Episode: How Is Artificial Intelligence Transforming Retail Organizations?

**Allison** (0:02)
Hi, everyone. Allison here. Our show is on winter break until March 19th, but that means we have the opportunity to share some fun bonus episodes with you. The first, which you'll hear today, takes place at the World Bank event at Georgetown University back in December of 2023 Sam and Shervin attended this event and moderated and joined panels to talk about how artificial intelligence is transforming organizations.
On this first episode, you will hear an abridged version of a panel interview conducted by Shervin that features Fabio Luzzi, Chief Data and Analytics Officer of Tapestry, the brand that runs Coach, Kate Spade, and other fashion brands, as well as Prakhar Mehrotra, who you might remember from the very first episode of Me, Myself, and AI. Prakhar Mehrotra is the Vice President of Applied AI at Walmart. Tune in to hear from these two retail leaders about how their industry is being shaped by artificial intelligence.
Let's get started.

**Shervin Khodabandeh** (0:57)
I'm Shervin Khodabandeh, Senior Partner at Boston Consulting Group. Excited to be kicking off this panel on AI in Retail. Very pleased to be joined by Mr. Fabio Luzzi from Tapestry, and Mr. Prakhar Mehrotra from Walmart.
Maybe I'll just turn to you, Fabio, for a quick intro and Prakhar, you do the same and then we get the panel started.

**Fabio Luzzi** (1:19)
Thank you. Thank you. Very happy to be here. So my name is Fabio Luzzi. My background is in statistics, economics, and computer science.
So I always worked with data and analytics in different shapes and forms across different industries.
I started with IBM, so technology and consulting, then moved to American Express where I spent a long time doing analytics and advanced analytics for business travel, risk management, business insights, and then after that, entertainment with Paramount, and most recently Tapestry, so retail and fashion. I'll tell you more about the industry. But yes, so I think it's interesting to mention about my experience because it gives you an idea of how data and analytics can really be applied across different industries.

**Prakhar Mehrotra** (2:07)
Hi, I'm Prakhar. I have been with Walmart for five and a half years now. Prior to Walmart, I was at Uber. One of the early data scientists at Uber worked on dynamic pricing there. Prior to Uber, I was at Twitter, and then I did my PhD in aeronautics actually from Caltech.
So I'm an aerospace engineer who became a data scientist. So anybody can become a data scientist. If an aerospace engineer can do that. AI is like we are part of our evolution right now.
This is like back in 40s when aeroplanes were getting developed. I think it's the same parallel right now in AI. People are paranoid, people are figuring out whether how to build aeroplanes back in 40s, World War was going on and same in AI right now. It's the same parallel. So very exciting to be here and share my thoughts with all of you.

**Shervin Khodabandeh** (3:00)
Thank you for that. Did you say aeronautics from Caltech? So I've known you for four years and I had no idea. I went to Caltech as well, so it's good that we meet.
So let me build on what you said about the transformational power, and I'll ask you both the same question. So Fabio, first, where do you think the biggest value pools are with AI, and how is it transforming retail?

**Fabio Luzzi** (3:25)
Before I answer the question, maybe I can give a quick overview of the industry I'm in.
Many of you may not be familiar with Tapestry, but I'm sure all of you are familiar with the brands we own. So we are a house of fashion brands. We own Coach, Kate Spade, and Seor Weitzman. So three fashion brands all based in New York. So we are in the business of designing and building beautiful products. So it's a very complex industry, as you can imagine, and it's a data-rich industry. For the most part, my company, specifically, is direct to consumers. So we capture and own a lot of transaction-level data. So it's a data-rich company and it's a very complex business.
You can probably imagine the value chain is very long. It takes around one year from when you start planning and start designing a product to when that product is available on the shelves or online for the customers to buy. So the lead times are very long and there is a lot that happens in between.
So it's a very intertwined steps across the value chain from planning to merchandising when you start building the assortment to buying when you start investing on the assortment and then supply chain, logistics, marketing, and all these steps are connected. There's a lot of feedback loops. So it's a very complex business, but it's data rich. So it's a great candidate to really leverage data, AI and ML. So we want to grow but in a healthy way with healthy margin. So and there are two macro areas where we've been applying AI, and we're looking into AI to make this happen. One is enhancing customer experience, which you can do in different ways. And we can drill down. Enhancing customer experience and then enhancing operational processes.