By Jane Kuhuk, PR Manager, Competera
Customers are more informed than ever and now expect more from the retailers they purchase from. To help meet their needs, many retailers are turning to Artificial Intelligence (AI). In the text to follow, we’ll explore some of the ways that AI is being used to benefit both retailers and consumers.
AI and Big Data in Retail
Retailers have more data than ever on customers and their purchase history. What customers buy, when, and where is all part of the general notion of “big data.” While the concept of big data is not necessarily new to retail, how it is used is continuously expanding.
Once enough big data is collected and processed, AI-based software can reveal many different patterns. For example, a retailer may find out that people tend to buy potting soil and flower seeds at the same time or they may see an increase in sales of green shirts around the Christmas holiday. The analysis of big data is extremely helpful to optimize both internal processes like supply chain management and ecommerce pricing, as well as various operations from the perspective of the customer.
Targeted Marketing & Personalization
One of the ways that businesses use AI and big data is to enhance their customer experience through targeted marketing and personalized promotional campaigns. Traditionally, promotions and marketing were not very customer-specific; customers were usually divided into core groups (e.g. mothers, teenagers, etc.) and campaigns were made revolving around these groups. Thanks to AI, retailers can identify specific customers and advertise the products that are likely the most appealing to them. Advanced software can analyze your previous purchasing history to determine the products that you will likely enjoy the most, similar to Amazon’s recommended products engine.
This can go a step further, too. Newer, more advanced, AI-based technologies are allowing retailers to personalize offers even further. For example, a customer might receive gift recommendations for a family member’s birthday within that month via email, or receive a discount for their own birthday. In the future, AI will likely provide personalized ads and recommendations in-store as well. Cameras and other identifiers will notice your presence, and AI-based software can process all information stored on you, to send you discount notifications and product recommendations upon entering a particular store.
AI and Omnichannel
AI is also helping retailers market more effectively, in general. Advertising is no longer limited to newspapers and magazines, and retailers may struggle to maintain consistent marketing across all channels. Omnichannel marketing is a huge buzzword in the retail industry at the moment for this reason. Using AI, any retailer can manage their marketing strategy efficiently, making sure that a user’s customer experience is consistent whether they are using their phone, their computer or even shopping in-store. It can also help them maintain a strong social media presence, which is becoming an increasingly important advertising method.
Lastly, AI can also handle customer service across all channels via chatbots and other similar technologies. These chatbots can not only answer customer questions and concerns but can also help customers locate the products they are looking for online, so they don’t have to browse a retailer’s entire category. Northface is a brand that has taken full advantage of more advanced AI chatbots in this way. Furthermore, this notion of AI helping customers locate products can and will be brought to in-store locations in the future as more brick-and-mortar locations begin to follow the likes of stores like AmazonGo, which are heavily based on AI technologies.
So while AI is not necessarily a new technology, it is becoming increasingly popular as a solution for retailers. In regards to customer experience, AI has the potential to improve and personalize advertisements, maintain consistency for omnichannel marketing strategies, and provide faster customer service both online and in-store. Whether customers are aware of it or not, their shopping needs are probably already being catered to by AI-based software in some way, shape or form. Most consumers have already had the pleasure of products being recommended to them according to their unique purchase history, or they have had personalized discounts advertised to them. We can expect our shopping experience to be handled by AI technologies even more so in the future as it continues to enhance, optimize, and perfect the way that retailers engage and serve their customers.
About the Author
Yevheniia Kuhuk, PR manager at Competera. Yevheniia is an experienced writer, project manager, and translator with a demonstrated history of working in media production.