Simon Farthing, Director of Global Strategy and Insights, Monetate, explains why AI, when used well, can help retailers deliver a more personalised experience
Consumers are more demanding now than they ever have been. This shift in behaviour is no doubt due to the fact that technology has advanced to the point of delivering personalised, tailored experiences, as well as instant access to multiple brand touchpoints, at faster speeds than ever.
Recent research from International Data Corporation indicated that Artificial Intelligence is helping retailers to achieve this, while reducing costs and implementing personalised experiences for consumers at scale. However, not all brands are investing in these capabilities.
While spending on AI is set to hit $5.2billion in Europe this year, retail is still lagging behind other industries, such as financial services and manufacturing, when it comes to integrating AI into their operations.
Research shows that 74% of UK retailers are unable to assess the full value of their digital marketing spend as they’re unable to accurately attribute the impact online activity has on footfall. Therefore, it’s important retailers get this right at the first digital interaction, to help convergence as the online customer journey compliments the physical shopping experience.
For retailers, the consequences could be challenging unless they integrate new technology to enhance the customer experience.
The Power of Personalisation
In its infancy, personalisation was as simple as addressing a customer by their first name. This used to be a benchmark for success, but customers now expect much more integrated and advanced experiences today. A name might help a business get a foot through the door, but it won’t guarantee customers will stay for any meaningful period of time, or return again.
By harnessing these technologies and the data it provides, retailers will be able to instil long-lasting loyalty amongst customers.
Research from Accenture found that 56% of consumers are more likely to shop at a retailer in-store or online that recognises them by name. Despite there being the demand for it, many brands are just not equipped with AI technology to do so and struggle to know where to start.
Use Data to Give the Best Possible Service
It’s a startling fact that 96% of online shoppers don’t convert to sales. This is a huge opportunity for retailers to better understand their customers and serve them what they want, when they want it. For many retailers today, the level of online service isn’t as good as it could be, which explains why only 4% of shoppers go through with a transaction.
By drawing on existing data to identify suggested categories, retailers can understand the types of products consumers are interested in and provide an enhanced experience to help navigate consumers to the products they want.
If brands can take small steps to implement basic measures to make customers feel as though they’re getting a unique experience, this is the differentiating factor between a customer returning again, or going elsewhere for a better experience.
The Business Benefits of AI
Our recent Personalisation Development Study conducted earlier this year explored the success factors in how brands create more loyal and lasting customer relationships.
The study found that for 86% of companies achieving high ROI, personalisation made up 21% or more of their marketing budget. Added to this, 74% of businesses that exceeded revenue goals in 2018 have a dedicated budget for personalisation.
By allowing AI to do the hard work, to test and optimise, segment and target, retailers can reduce the time they currently spend attempting to decode information manually.
Retail brands who focus on prioritising customer loyalty and customer lifetime value will experience long-term success. Those who are meeting and exceeding revenue targets are the ones that take a serious customer-centric approach to drive pervasive and persistent customer experiences.
Not only will personalisation through AI technology attract customers and increase the likelihood of conversion, customers will thank retailers for providing it.