How AI can Drive Retail Sales and Marketing
With a plethora of opportunities, retail serves as a great platform for AI and it’s true the other way round
Photo Credit : Reuters
Applications of AI are almost limitless when it comes to retail. Product pricing optimisation, sales and customer service forecasting, precise ad targeting, website content customisation, prospect segmentation — these are the most obvious examples of how AI can boost your sales and save your marketing budget.As usual, numbers speak best for the returns by AI in retail. Almost 55% of Amazon’s sales come from personal recommendations made by AI and ML algorithms. Target Corporation achieved 15 to 30% growth in revenue with the help of AI and machine learning predictive models. This speaks of AI capable of improving retail sales and marketing performance.
Breaking Down AI’s Impact on Retail Sales and Marketing
- Sales Guidance: AI can compare the preferences for each customer, sourced from hundreds of data points, which allows retailers to reach out with a customized ‘most effective path to closure’ for each customer. Shoppers will receive suggestions based on their shopping lists – a belt that matches a pair of pants, painting supplies to help with a can of paint, a wine paired to a dinner recipe. The AI driven suggestions can subtly nudge people along when they are making a big-ticket purchase online but are not ready to hit the buy button.
- Conversation Guidance for Hyper-personalization: AI systems allow deep dive into customer preferences and sentiments, understanding their spending patterns and recommend products they are likely to purchase. This works very well for personalization, personalize the offers and products to match customer preferences and filters. True Religion has implemented a highly personalised approach to its customers with the help of Einstein, an AI tool from Salesforce and witnessed 9% revenue growth.
Predictive product search:AI programs can be used for image search or video search which enables the engine to study a particular image. Pinterest Lens, a Shazam-like service conducts visual searches based on items in the everyday world. Customers can point their camera at, say, a piece of furniture or item of clothing and Lens can help them find it online. This mechanism drives a Guided Product Search — based on the idea that at times a customer may not know what they're looking for until they see it —it also serves as a visual search tool that can find similar images inside the billions of pins that Pinterest has collected.Etsy bought Blackbird Technologies last fall to apply the firm's image-recognition and natural-language processing to its search function. And notably, Amazon is planning to use its own AI technology on its Web Services in its new Amazon Go grocery stores.
Purchase Assistance: From Chatbots to sophisticated systems that can interact with humans, this technology can be leveraged to provide seamless shopping experience. Chatbots are currently used in customer service or support and help customers to make purchases. Companies like Starbucks, Whole Foods and Pizza Hut, are already working to implement chatbots and VPAs to facilitate customer purchases this can be done by tracking customer purchases, behavior and preferences. This information can be integrated into a conversation to recommend products or services.
Smart content for conversations: AI systems can tap customer voice over social media to target individual users to generate more personalized content. For ads and promotions, and across sales channels retailers can be guided to use precise words, phrases and images to engage customers by creating a specific customer response.
Retail is a hotbed of analytics, AI and ML this Diwali
With the Big India Festive season around the corner, retailers can integrate AI into their functions. The key motive is to use customer data to create timely insight into what customers are doing in-store and/or online and convert that into opportunities that increase sales.
But, what all can retailers do differently this festive season to differentiate their sales from competitors?
- Specialized offers for loyal customers: Offer your usual discounts and some special ones for the chosen few. Innovative festive offers will not only help you carve a niche for your brand but also increase the brand recall for the plain ‘quirkiness’.
- Social Media Contests: Planning a grand social media contest is going to be a great step ahead. The more creative the contest, the more promise it holds for your brand recall and customer engagement.
- Surprise gift with each purchase: Pack-in a special surprise in each delivery you make this festive season. Who won’t like a purchase voucher or an additional discount for next purchase. This will entice them to shop more. Bonanza for the retail sales!
- Creative Ads:Retailers should use this season to promote their sales by coming up with the most creative ad campaigns. Half of any retailer’s work is done by the ads when they touch customer sentiment. Sure-shot success when it comes to customer attention.
With a plethora of opportunities, retail serves as a great platform for AI and it’s true the other way round. For retailers, using this technology can mean gaining an immediate edge over competition that will be further optimized over time with new and additional data, creating a sustainable benefit optimized business with increased revenues, lower expenses, and higher margins.
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