Personalization: the New Digital Shopping Experience

A recent Infosys Rethinking Retail Survey found that 86% of consumers who have experienced personalization technology while shopping have admitted that it has influenced their purchasing decisions. Moreover, 69% of consumers responded to the study stating that consistency of customer service across physical and online stores was of importance to them.

Retailers already know that they need to provide a positive customer experience across online channels as well as brick and mortar — however, as the online marketplace becomes overly saturated, retailers will need to differentiate themselves by implementing more personalized and innovative technology to attract customers and their loyalty. And what will this personalized technology look like for consumers?

We should expect the future of shopping to lie in a seamless interaction between machine and the shopper — with technology guiding the customer through their purchasing journey. This personal interaction between retailer and consumer will advise the customer from product discovery to purchase, while building an ongoing relationship based on knowledge between the retailer and the consumer.

Personalized Shopping Today
Today, we are already seeing retailers that are utilizing product recommendations beginning to try to provide a more personalized experience to their customers. Amazon, for example, utilizes product recommendations on their e-commerce platform in order to try to present shoppers with items that are relevant to their previous purchases. Amazon incorporates what is called collaborative filtering, “if you bought product A, you will probably like product B.” This type of recommendation system works well for cheap products sold in large quantities like books, music and films, but does not work well for clothes, TVs or cars  or other purchases that are driven by more complicated decision making. For these kinds of products more advanced technology is needed.  Advanced recommendation systems on e-commerce platforms will be a valuable tool for retailers to provide personalization to shoppers to guide them through their journey, but will evolve past Amazon’s model that we see today.

This year at the Consumer Electronics Show, we began to see technologies that will transform into the retail sector that will provide truly intelligent recommendations to customers. For example, smart mirrors will incorporate artificial intelligence technology that will give customers advice on what clothing to purchase. The technology will be able to provide customers suggestions on lower price options of similar products, other products that would match the clothing well, and more. Big data and advanced analytics on the back-end, paired with imaging technology can also take this to the next level by fitting clothes to the consumers’ body.

Recently, Ginni Rometty, the CEO of IBM, spoke at the Nation Retail Federation (NRF) annual conference. Here, she introduced a new “personal shopper” that will be rolled out in the North Face stores later this year. She coined what this assistant will provide as introducing the “new era of commerce,” and demo-ed the technology. This cognitive device utilizes knowledge of the brand’s product database to provide recommendations to the end-user. For example, a shopper can tell this device that they are planning on going on a trip and need a tent, sharing the location of where they would like to go. The technology behind this “shopper” takes into account the user’s request, contextual information about the location (including weather and other ambient information) in order to recommend the shopper the best product for their request. If they are going camping in the Adirondacks in New York, for example, the technology will know to weather-appropriate tents that are built for such a climate and terrain.

The Future Consumer Experience
We’re starting to see major retailers making massive technology investments that we may see come to fruition to create these types of consumer experiences — Nordstrom announced this month that they plan to make a multi-billion dollar investment in e-commerce technology in the coming years, and other large retailers have been announcing their increasingly mobile and online-centric plans. Retailers like Nordstrom will take the Amazon-like recommendations to the next level by incorporating artificial intelligence technology to develop a deep knowledge of the user. This will allow them to provide truly intelligent recommendations, presenting shoppers with products that they want or need, based on past behaviours and preferences.  

While examples of more sophisticated personal or virtual assistants are starting to be more prevalent and showcased to consumers, in the future we will see systems that utilize ambient data and product databases to truly present products that the user wants and needs. Next-generation of devices will take this trust and relationship that the devices of today are looking to establish with customers to a new level. In the future, devices will be able to truly learn about their user over time and develop a deep understanding of their wants and needs. The virtual assistants of the future will utilize more complex data patterns, more human like interfaces and natural language to create a more seamless user experience.

Expertmaker's CMO Martin Rugfelt is a mobile Internet entrepreneur focused on Artificial Intelligence, machine learning and big data business development. He has been involved in several startups working with projects like the semantic Web, mobile search, location based services and communities with focus on mobile opportunities. Previous positions include director for product development at Orange Group, director for business development at GoldenGekko as well as leading roles in Framfab, Wezap, Simpay. Martin also serves on the board of Expelytics AB a life science data analytics and EDC/eCRF solutions provider.



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