The world’s largest health and beauty retailer says AI will make shopping ‘more human, not less’

Malina Ngai, the CEO of the world's largest health and beauty retailer, AS Watson, has voiced her concerns over the notion of using artificial intelligence to reduce the workforce. During the Fortune Leaders Forum on September 8, she questioned whether AI would lead to a significant decrease in jobs or enhance the quality of employees' intelligence. Numerous tech companies have recently downsized their staff, with Oracle cutting 21,000 jobs (13% of its workforce) in the past year alone.

Rather than subscribing to a "human-AI partnership" strategy, Ngai, who previously spearheaded AS Watson's digital transformation, advocates for leveraging AI to improve human performance. According to her, implementing an AI assistant can help employees think faster and smarter, leading to an increase in face-to-face interactions rather than screen time.

Since implementing this strategy in October, AS Watson has reported a significant rise in employee engagement scores, as staff members focus more on in-person customer service, which has consequently contributed to a growing "customer love score."

Ngai emphasizes that AI is not merely a tool for streamlining processes, but an opportunity to reinvent and transform the retail model. She believes that retail will become more human, not less, in the future. Similar sentiments have been expressed by Costco CEO Ron Vachris, who recently stated that AI is "elevating" workers. Founded in 1841 as a pharmacy in Hong Kong, the company now operates over 17,000 outlets in 31 markets, making it the world's largest health and beauty retailer by store count.

The conglomerate is reportedly considering listing the unit in both Hong Kong and London with an estimated valuation of around $30 billion.

AS Watson's use of AI has also led to changes in the workforce, particularly in its warehouses. For instance, at a Foshan warehouse, 80% of the workforce previously comprised male employees due to the physically demanding nature of the job. However, with the introduction of robots to perform heavy lifting tasks, the site now has a more balanced gender ratio, with 62% of the workforce being female.

Ngai believes that such technological advancements can also bring diversity to a company, challenging the traditional assumption that AI will only accelerate existing practices.