TECHNOLOGY

Study: More than half of retailers ready for AI

BY Deena M. Amato-McCoy

In a move to step up their customer experiences, more retailers are embracing artificial intelligence (AI).

This was according to the third quarterly “2017 E-commerce Performance Index,” a report from SLI Systems.

According to the data, 54% of companies reported they are using or plan to add AI in the future. The largest group of these respondents (20%) expect to add AI within the next 12 months.

The most popular applications for AI — among both existing retail users and those that plan to use AI within the next 12 months — are personalized product recommendations (56%), customer service requests (41%) and chatbots (35%). Very few e-commerce professionals currently use AI for virtual reality, voice-activated apps, augmented reality or virtual buying assistants, or plan to in the next year, the study said.

Of those planning to implement AI, 13% plan to build their own technology, 60% will buy existing technology, and 27% expect to blend "build and buy.”

Beyond AI, replatforming operating infrastructures is the top initiative for 17% of respondents this quarter, followed by customer experience (CX) (16%). Inventory, logistics and fulfillment (15%) follow behind.

"This quarter replatforming edged out CX as the top priority for e-commerce,” said Carter Perez, VP sales, Americas and Australia, SLI Systems. “We're seeing retailers working to ensure their platform and search strategies are in peak shape for driving holiday site traffic and optimizing merchandising and conversion.”

The holiday season may be right around the corner, but retailers remain focused on sales for this quarter. For example, 92% of retailers are confident they will grow revenue in Q3, closely aligning with results from Q1 and Q2. A majority of retailers (87%) also expect their online revenues to increase in Q3 compared to Q3 2016.

Meanwhile, 80% expect revenue from mobile sites and apps to increase compared to the same quarter in 2016. All retailers (100%) in the hardware/home-improvement segment, and 93% in apparel, anticipate an increase.

Selling to new geographic markets experienced the largest drop, moving to 20% in Q3 from a stable 30% in the first and second quarters.

As the holiday season approaches, retailers have high hopes for brick-and-mortar. In fact, 45% estimate a rise in Q3 in-store revenue/profits compared to the same quarter last year — an improvement of 6% points from Q2.

Of the retailers that participate in holiday sales, nearly a third (31%) said the 2017 holiday shopping season will begin earlier in 2016, with 31% also citing October as the official start of the season.

Meanwhile, 77% expect an increase in holiday season revenue this year. Most forecast modest rises of up to 10%, and only 4% of anticipate aggressive increases over 30%, the study reported.

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TECHNOLOGY

Shop.org Takeaway: Three steps to next-gen personalization

BY Deena M. Amato-McCoy

Consumers are becoming more digitally influenced on a seemingly daily basis — but omnichannel retailers find themselves hard-pressed to keep up the pace. Retailers need to meet their needs across all touchpoints, and create a frictionless shopping experience despite where the shopping journey starts and ends.

To achieve this goal, successful retailers are adopting a new digital tools that allow them to “connect the dots,” and personally engage shoppers before, during and following the shopping experience. Industry observers discussed this new level of personalization during Shop.org, held in Los Angeles, Sept. 25-28.

Among the top solutions are:

Voice: Conversational commerce is shaping up to be one of the year’s hottest disruptors, and momentum continues to grow. As customers grow more comfortable using digital voice assistants found on devices like Amazon Echo and Dot, Google Home, and others, retailers have a new way to personalize the shopping experience, and remove some of the friction that still occurs via online and mobile transactions.

Jet.com Walmart’s e-commerce arm, is so bullish on voice that it is one of the company’s “top priorities this year,” Marc Lore, president and CEO, of Walmart e-commerce U.S., said at shop.org.

“You have to look beyond the technology and toward what it enables,” Lore added. “It’s more than a tool that helps customers order product for delivery. It gives us the chance to connect with shoppers one-on-one. And we can use data to become better merchandisers.”

Artificial intelligence: Retailers that use AI are essentially adopting programs that teach their computers to learn patterns. Then brands can use results to deliver better customer experiences.

AI is playing a critical role across Disney’s retail channels. Committed to delivering “a more immersive, personalized, and robust omnichannel experience than ever before, “Disney is adding AI to our e-commerce site so we can help improve the guest experience online and in-store,” said Mike White, senior VP and chief technology officer for Disney consumer products and interactive media.

AI is helping Disney understand its best-selling category SKUs searched online, and then using this data to evaluate customer affinities. “Then we can expand online and in-store assortments, which add more value to their experiences,” he added.

Next-gen search tools: Kohl’s is becoming increasingly bullish on the value of its search tools. Why?

“Search is the top way that most of our customers begin their purchase journey — and most searches are happening on customers’ smartphones,” Sarah Rasmusen, the company’s VP, digital/e-commerce, merchandising &amp analytics.

That’s why the company is already exploring how to expand the value — and functionality — of this important omnichannel tool. For Kohl’s, this could include a new component Rasmusen described as “findability.”

Kohl’s envisions a solution that will bridge the gap between digital and physical stores. It could also solve what she described as “analysis paralysis,” or collecting so much information that the shopper can’t make a buying decision.

By integrating findability functionality within search, customers will “gain specific details on desired merchandise and where to find it inside of a store,” she explained. “This is the next evolution of search — and it will only be successful if it can merge physical and digital retailing.”

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TECHNOLOGY

Gifting retailer to launch ‘voice-activated’ shopping

BY Deena M. Amato-McCoy

1-800-Flowers.com continues to embrace the conversational commerce game.

The gifting brand is preparing to launch a program that will enable its customers to place orders via Google Assistant on their Android phones and iPhones. Using their voice or text, they can access a menu of gifting categories, and place orders for delivery nationwide. The service also enables users to specify same-day delivery or schedule a gift’s arrival for a future date.

“As a company, we continue to embrace and invest in technology that makes it easier for gift-givers to shop with us, wherever, whenever and however they choose,” said Amit Shah, the retailer’s chief marketing officer. “Voice interaction and artificial intelligence are rapidly transforming the customer experience, and we are thrilled to team up with Google to offer shoppers yet another convenient way to connect with us.”

The Google Assistant joins other recent technology initiatives by 1-800-Flowers.com designed to enhance the customer experience, including the company's first online gift concierge, GWYN (Gifts When You Need) powered by IBM Watson. The company also features services that enables users to order gifts through a conversational chatbot on Facebook Messenger, as well as a voice-enabled Skill on Amazon Alexa.

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