Retail marketing has been subject to remarkable innovations in technology over the years. Be it optimizing the in-store customer experience or making online shopping delightful, technology has offered a strong pedestal for retail marketers to attract customers. Among the vast number of technological innovations, there is one technology that is a class apart from the rest – Artificial Intelligence (AI).
AI has the capability to combine and process large datasets really fast. It has detailed algorithms that can automatically learn on their own from data patterns. In retail, AI has numerous applications that essentially bridge the gap between physical and virtual sales channels. As per a research report by MarketsandMarkets, the AI in retail market globally is expected to grow up to USD $5 billion by 2022.
Artificial Intelligence: Transforming Retail Marketing
Retail marketers are today investing in AI to create a more nuanced and personalized experience for customers, both in-store and online. This results in the creation of better business to consumer interactions that generate higher engagement and revenue.
Without further ado, let’s take a look at how AI is transforming retail marketing:
1. AI-Based Recommendations
AI has the innate capacity to sift through massive amounts of customer data and draw valuable insights. In retail marketing, the primary objective is to present products that the customer is most likely to buy. This is done by tracking customer behavior on the website and mobile app and the past purchase history of the customer. Using AI to do this job enables marketers to automate the process for millions of customers. Every customer gets their own customized recommendations as per their brand activity.
Major retailers such as Amazon and Best Buy are quite adept at using AI-based recommendations on their website.
2. AI-Driven Personalization
Delivering personalized offers and messages to each customer can be achieved using new-age tools such as Customer Data Platforms (CDPs). But to provide millions of customers with their own personalized journeys requires the assistance of AI. Moreover, as AI can be used to keep track of customer behavior, it’s possible to deduce the preferred content, channels, and engagement time for each customer.
Retail marketers can, therefore, use AI to tailor personalization for customers on their preferred channels and on their preferred engagement times.
3. AI-Based Omnichannel Marketing
Omnichannel marketing involves the delivery of the same personalized offer on all the preferred channels of customers. This is quite difficult to achieve as it’s tough to keep track of all marketing channels used by a customer. A CDP’s single unified customer view can assist retail marketers in understanding which channels are used by the customer. By integrating AI with the CDP, marketers can accomplish omnichannel marketing at scale.
As a result, every customer receives the same personalized offer only on their preferred channels or touchpoints.
4. AI Chatbots
Chatbots were first introduced on websites and mobile apps to automate interactions by providing answers to the most common questions asked by retail customers. However, as personalization became the new norm, consumers started expecting a more humanized experience from these chatbots. Introducing AI chatbots solved this problem for retail marketers.
AI chatbots have the ability to think and provide answers to consumer questions instead of providing a fixed or common answer to all questions. These chatbots are comprised of sophisticated algorithms that could intuitively respond to each query with the most optimum answer that would mostly be provided by human customer care representatives. AI chatbots are currently being implemented by major retailers across the world. It’s only a matter of time before it sees widespread adoption by others.
The year 2020 hasn’t turned out according to the predictions of retail marketers. The arrival of COVID-19 has changed it completely. It has forced marketers to go back to their grassroots and start from scratch. The business strategy that they had in place at the beginning of the year needs to be revamped to fit the current situation. Technologies like AI and CDP provide the much-needed boost to attract and retain customers in the long run. It’s never too late to start this journey.
As Walmart CEO Doug McMillon once said “It’s really simple: If you are not meeting the wants and needs of the customer, you’re done. There’s not a lot of loyalty here.”
By Bijoy K.B | Senior Associate Marketing at Lemnisk