AI is the Answer for Thriving Retailers
It’s no secret that online sales have been growing exponentially with no sign of slowing down. Even purchases completed in-store often start online. Forrester predicts that digital channels now account for, or influence, more than half of all retail sales. On top of that, recent earnings delivered surprising growth for retailers actively investing in their digital properties — a welcome respite from in-store struggles.
Retail is a battlefield of businesses scrambling to retain customers, remain relevant, and decipher the ever-growing amount of data available. For retailers to not only survive, but thrive, during this industry transformation, simply having an online presence is not enough. They need the ability to interpret the multitude of data being generated across their digital properties – from websites to social to email – and uncover the kind of valuable insights necessary to deliver truly engaging and personalized experiences that consumers now expect consistently across all channels.
The answer to achieving this balance between customer expectation and retail reality? Artificial intelligence (AI).
AI: In the next 10 years, companies not using AI capabilities to make the most of their data will find it increasingly difficult to remain competitive. Data comes from all directions. Every like, search, and purchase creates additional data for retailers to process and interpret. This can be overwhelming for many organizations. But, with AI systems, the more data the better.
AI systems continue to learn as more and more data is received. AI provides the added brainpower to analyze this constant churn of information and monitor for new trends and opportunities… within seconds.
Retailers using modern, AI-infused solutions have a significant advantage in the ability to engage, convert and fulfill customer needs. AI removes the burden of trying to make sense of this mountain of complexity, so retailers can not only more effectively use all of their data, but can gain insights faster and turn what is learned into action in real-time.
AI can become a trusted advisor, drawing connections and uncovering patterns across all customer and business data to personalize interactions, identify trends, discover opportunities and fix potential issues before they impact sales and revenue. And while AI is handling the otherwise time-consuming tasks of analyzing mounds of data, identifying points of friction in the customer journey, and monitoring for competitive or business situations that need attention, retailers are rewarded with the time needed to focus on innovation.
With the power of AI, retailers can make smarter decisions faster to improve the customer experience and can effortlessly orchestrate pricing, content, fulfillment, service and support across all channels.
Imagine this scenario: A woman in Miami gets an invitation for a last-minute evening gala, while at work in the morning. Needing a glamorous dress to wear fast, she goes to her favorite retailer’s online store and logs in through her Instagram account. With access to her social account, the retailer recognizes color and style preferences – combines that insight with past purchases – and presents personalized recommendations. What the shopper doesn’t see is that the retailer made the data connections leading to recommendations with the power of AI and, in fact, even applied weather predictions for downtown Miami.
With these recommendations, and the one-on-one assistance of a digital concierge, the woman eliminates time otherwise spent browsing through dozens of products and has the option of having the package delivered straight to her apartment that afternoon, or stopping by the store after work to try on her dress and confirm the size, just in time for the gala…with an umbrella added in as a special touch.
As seen in this example, an AI-powered platform enables the retailer to effortlessly orchestrate content, fulfillment, service and exceptional support while delivering a seamless customer experience. With benefits like these, the question of adopting AI is not ‘if’, but rather ‘how’ can it be integrated?
Corralling data to gain insights and find opportunities: As mentioned earlier, retailers have a vast amount of insight about their customers at their fingertips: social media, mobile apps, websites and email lists. By analyzing and recognizing patterns, retailers can find opportunities for deeper customer engagement and identify opportunities for immediate action.
Personalize offers. Almost 45% of customers say they will likely shop at a retailer again if they have a personalized shopping experience. Using data and insights, retailers can identify opportunities for more personalized and relevant offers, messages and product recommendations…before customers even know they need something.
AI can interpret when a shopper needs inspiration, sympathy or speed by analyzing such things as tone or social sentiment. Understanding customers at this level, and adjusting the experience accordingly, could not only lead to an actual purchase, but create stronger customer loyalty. The goal should be to craft experiences that attract, retain and, yes, even entertain.
Optimize fulfillment. Omnichannel customers follow a variety of patterns — from researching a product online and buying it in store, to looking at it in person and ordering online with in-store delivery, to completing the entire process online. Today, AI is being used to help retailers orchestrate and optimize omnichannel fulfillment to meet delivery promises at the lowest possible cost. Now, retailers can more effectively manage inventory across all locations to avoid stock-out situations, reduce the potential for future markdowns and minimize the impact of returns on the bottom line.
Without a doubt, retailers face increasing pressure to deliver seamless customer experiences while demonstrating business growth to their shareholders. With the growing amount of data at their fingertips, retailers have an enormous opportunity to take back market share. AI is the answer to thrive in this transforming industry and connect with shoppers on a deeper, more personal level.
Richard Hearn is Global Chief Revenue Officer for the Watson Customer Engagement division of IBM.
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