AI: The Next Phase in Retail Innovationby MarketSource
This holiday season will mark the second 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. According to a recent survey, about 45 percent of retailers plan to use AI within the next three years to improve customer experiences. Additionally, 55 percent of retailers are refining mobile shopping and unified commerce experiences with an eye toward increasing customer loyalty and improving the overall customer experience.
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 customer experience (CX) strategies that better serve and sell based on human behavior, intuitive algorithms and artificial intelligence/machine learning.
If you want further proof that AI is the future of retail innovation, just look at Amazon’s purchase of Whole Foods. Amazon didn’t buy an upscale grocery chain just for the organic produce: 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,” and a lot of that work goes toward making Amazon’s fulfilment centers more efficient and toward giving Amazon Web Services customers access to cutting-edge artificial intelligence models they’d never be able to build on their own. Which means that investing in “big data” products isn’t going to be enough anymore for retailers. AI models are going to dictate how products are sold over the next decade.
So what will those AI-based models look like? They’re going to prioritize the true delivery of frictionless, one-to-one personalization across channels, at the right time with the right message in moments that matter — at scale. They’ll be focused on three basic strategies:
1. Focus on engagement. Reach was a focus of the last few years to drive views, clicks, and conversions. However, AI and machine learning is focused on improving engagement tools to scale cross-channel, personalized messaging in the moments that matter in the channel customers prefer.
2. What are moments that matter? Customers use their favorite devices for everything that’s important to them. This means that the window for engagement is only open at certain times. It’s also important to remember that timing, place, message, and format is different for different people. This is why AI platforms will help you scale personalization efforts by automatically building bridges between brands, people, channels, value, and time.
3. Get extremely personalized, but be respectful. The connected consumer wants to be treated as an audience of one and part of that is not wanting to be sold 24/7. AI will help brands determine the pace at which consumers want to be engaged by serving up only the right message at the right time and on the right device. But even with all of that, you still need the human touch of content crafting and quality customer service.