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If Done Right, Artificial Intelligence Can Transform the Retail Experience

In this special guest feature, Greg Ng, VP of Digital Engagement at PointSource explains how AI is helping companies tailor the user experience to each customer’s specific wants and needs. Gregory is a leading creative director, designer and direct marketer. As VP of Digital Engagement at PointSource, Gregory is responsible for developing new digital offerings for clients as well as partnering with architecture, development and delivery teams to ensure their long-term success. Prior to joining PointSource, Gregory spent nearly 20 years focused on developing effective, integrated, results-driven marketing programs for some of the world’s biggest brands, including numerous Fortune 500 companies.

Artificial intelligence (AI) has emerged as a distinct trend from a decade characterized by big data. With investments in AI tripling since 2013 and AI-based businesses earning almost $1.5 billion in equity funding by mid-2016, it’s clear that the technology is a game changer for a variety of industries – including retail.

Of course, AI is a broad concept, one that encompasses everything from sci-fi robots to self-driving cars. For retailers, the most significant change brought on by this technology is increased personalization capabilities. AI empowers retailers to harness big data insights into actionable strategies, like real-time price sensitivity and tailored product recommendations. As the technology continues to evolve, the idea of an experience tailored to the individual consumer becomes more of a reality.

But AI is complicated, and finding a seamless strategy that applies these insights across the user experience in a frictionless format is easier said than done. While AI-powered personalization can revolutionize the customer experience, it can also damage customer relationships if executed poorly. When incorporating this technology into marketing strategies, there are a few mistakes that can damage the user experience.

Inconsistent multichannel personalization

Since consumers are interacting with brands across many channels (desktop websites, mobile apps, in-store experiences and more), personalization is most effective when it ties each interaction neatly together. While new technology enables the use of millions of data points, it’s crucial to establish a digital framework that creates a smooth, holistic experience across platforms.

Compare your personalization strategy to a call center. Regardless of which call center a customer contacts, she should receive the same answer from the information she provides. An inconsistent response would be unacceptable for a retailer’s call center, so the same standard should exist within a personalization strategy. A customer’s behavior on one platform should inform the entire experience.

For instance, a shopper browsing a retailer’s website for black sweaters on a mobile device, who then made a purchase on her desktop, shouldn’t be targeted with continuous recommendations for the same sweater on her phone. The customer’s previous behavior on one channel should inform her experience with the entire brand.

Overstepping customer privacy

While AI strategies can create more intimate, positive relationships between brands and customers, they can also go too far. In other words, poorly executed personalization efforts can be creepy.

Retailers should view each customer touchpoint as a check-in. If the customer chooses to engage, then that is an indication to the retailer that they should continue to share personalized content with them. If they do not engage, retailers need to pause and reconsider the type and frequency of tailored content they’re sending. This could be a sign to back off.

As concerns about the invasive nature of technology intensify, retailers must always be sensitive about boundaries. Shoppers will be easily turned off if they feel retailers are disregarding their privacy. As technology improves and gives retailers access to more and more information about their customers, marketers will have to determine each individual’s preferences in order to keep from going too far.

Poor preparation and ineffective technology
Within the next few years, in-depth personalization will be the norm, and the retailers that lag behind will lose significant share in the market. Knowing this, many have tried to support personalization strategies only to miss the mark due to poor integration of digital solutions.

A primary cause is that many retailers try to piecemeal solutions to avoid expensive technology investments. There’s no getting around the fact that a digital-ready solution with AI capabilities comes at a price. For many retailers, this means a top-to-bottom digital transformation, not a half-baked attempt at improving outdated technology. However, the ROI of a digital transformation far outweighs any upfront costs. By avoiding the necessary investments, retailers will only stunt their digital capabilities, leaving them significantly behind the competition.

The future of AI personalization

While retailers and consumers are already using AI in their everyday interactions, it’s constantly evolving and advancing. Consider Amazon’s digital personal assistant Alexa. Alexa uses keywords and speech recognition to perform tasks that range from playing music to placing online orders, integrated with personal customer information. For instance, a user asking Alexa for Thai food recommendations would receive a personalized response based on geographic information and past user behavior. While this clearly highlights what personalization can do, it is only the tip of the iceberg.

With more innovation, next generation’s Alexa could respond to that user with even more nuance. Alexa could recognize multiple people in the background and suggest a restaurant with group deals, or even recognize subtle shifts in tone. For instance, the assistant might provide an impatient customer with recommendations for restaurants known for speedy service.

Of course, these are just a few examples of how AI can improve the digital user experience moving forward. The possibilities for retailers and consumers are unknown and seemingly endless, and as technology advances companies will be able to personalize user experiences down to the very moment they happen.

To master the growing trend, companies must prepare for a full-fledged AI integration. This could mean improving existing capabilities and unifying omnichannel strategies for some. For other companies, embracing AI will require a complete digital transformation. Either way, retailers need to get on board now.

 

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