AI: The Next Phase in Retail Innovation

by MarketSource

This holiday season will mark the third year that marketers are leveraging artificial intelligence (AI) to better understand, connect with, and create superior experiences for consumers. As connected customers continue to evolve, so must the foundation of modern commerce. The connected customer is always online and informed, demanding personalization, convenience, and valued experiences. Retailers are already showing signs of embracing AI as approximately 45 percent of them plan to use AI within the next three years to improve customer experiences (CX).

Previously, new retail technology not only scaled online sales, service, and marketing, it also scaled legacy-based approaches in doing so. But in this next phase, the new disruptors will prioritize extreme personalization, empathy, and human-insights to drive intelligent technology platforms that scale compassionate, relevant, and value-added engagement. True innovation will be a blend of next-gen technology and CX strategies that better serve and sell based on human behavior, intuitive algorithms, and AI/machine learning.

Let’s look at Amazon’s purchase of Whole Foods. Whole Foods operates hundreds of retail data mines, and Amazon just fused a superior AI team with one of the best sources of in-store consumer shopping data in the U.S. Despite what it’s done to brick-and-mortar stores, Amazon has actually has been trying to establish a physical store presence for a few years now. With this acquisition, it will now control more than 400 sources of prime data on consumer behavior.

Swami Sivasubramanian, Amazon’s VP of AI, recently said that Amazon has “thousands of engineers focused on AI.” That work is focused on making Amazon’s fulfillment centers more efficient and toward giving Amazon Web Services customers access to cutting-edge AI models they’d never be able to build on their own. This means that investing in “big data” products isn’t going to be enough anymore for retailers.

AI models will dictate how products are sold over the next decade, so it’s important to know what those models will look like. They’re going to prioritize omnichannel and focused on three basic strategies.

1. Emphasize engagement. 

Reach was a major focus of the last few years to drive views, clicks, and conversions. However, AI and machine learning pivots around engagement tools that scale omnichannel, personalized messaging in the moments that matter, on whichever device the consumer prefers.

2. Focus on the moments that matter most.  

Customers use their favorite devices for everything, every day. This means that the open window for engagement is small. It’s also important to remember that timing, place, message, and format are different for different people. Properly utilizing AI platforms will help you scale personalization efforts by automatically building bridges between brands, people, channels, value, and time.

3. Be extremely personalized, but be respectful.

The connected consumer wants to be treated as an individual, and crucial part of that is not wanting to be sold to 24/7. AI will help brands determine the pace at which consumers want to be engaged by serving up the right message at the best time and on the most loved device. Even so, you still need the human touch of content crafting and quality customer service.

Ready to take the next step into retail innovation? Find out how MarketSource can help through our assessment process or contact us now.

Topic: Retail

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