2023 may be shaping up as the first holiday shopping season driven by artificial intelligence — for the brands that are positioned and equipped to leverage this technology at scale. For the brands that aren’t, 2023 could end up being the year their customers’ experiences fall short of expectations, which could determine the difference between winners and losers.
Given its ability to process vast amounts of data, analyze patterns, and make intelligent decisions, AI has the potential to transform marketing strategies. In retail, delivering the right products, coupled with an engaging customer experience, can make all the difference for digital shoppers. As AI technologies continue to rapidly advance, the retailers that harness capabilities effectively will be well-positioned to thrive during a holiday season that promises to be more data-driven than ever.
Since the dawn of digital marketing, brands have been banking on the idea that a combination of rich consumer data and powerful software will yield highly relevant and personalized marketing campaigns. AI has the power to finally bring this vision to reality.
Today’s AI-powered algorithms can make sense of vast amounts of customer data, from demographics to online journeys to purchase behavior and preferences, to create highly customized marketing campaigns. In addition, retailers are investing in AI-powered chatbots and virtual assistants which can engage with customers in real time, providing tailored responses and product suggestions based on individual interactions. With AI, relevant content, smart recommendations and precisely targeted offers can be delivered at scale, as though the most attentive shop clerk could suddenly serve thousands of customers at once. For retailers, this should translate directly into more sales that can be attributed to tailored marketing campaigns, producing much higher return on investment.
Improving Customer Insights
It’s not just targeting that can be vastly improved by AI. A growing crop of AI-driven analytics tools can help brands — particularly retailers — understand their customers much better, allowing them to make more informed decisions on new products and services. Because these new AI systems are able to sift through vast amounts of data, they're able to help brand managers uncover actionable insights about customer behavior, sentiment and preferences. For retailers, this information helps them refine their current marketing strategies, while enabling them to see around corners. Predictive analytics can help spot future customer trends, allowing marketers to proactively adjust their holiday campaigns and overall holiday strategies to better resonate with target audiences.
Of course, even the best planned marketing campaigns can fall short if potential customers are directed to shopping environments that are difficult to use, or if these shoppers aren’t given the support they need throughout the purchase journey. The marketers who will win out in the future are already leaning on AI-driven tools designed to provide instant support to customers — e.g., answering inquiries, resolving issues, and guiding them through the sales funnel.
These tools don’t just help brands close deals, but enable them to get smarter about each and every consumer interaction. Through the use of natural language processing and sentiment analysis, marketers can assess customer feedback and gauge sentiment around product offerings and customer experience so they never feel abandoned.
Failing to capitalize on AI doesn’t just mean that slow-moving retail brands won’t be able to provide better customer experiences. The risk in this highly competitive space becomes one where the marketers that aren’t advancing quickly on AI will stand out for all the wrong reasons, such as poorly timed or irrelevant campaigns or CX that lack insight or smart design. The race to master AI for retail isn’t just about having a stronger holiday shopping season, but for building a strong reputation and relationship with customers over time. That’s something no brand can afford to risk.
With over a decade of local search experience, Damian Rollison, SOCi's director of market insights, has focused his career on discovering innovative ways to help businesses large and small get noticed online.
With over a decade of local search experience, Damian Rollison, SOCi's Director of Market Insights, has focused his career on discovering innovative ways to help businesses large and small get noticed online. Damian's columns appear frequently at Street Fight, Search Engine Land, and other publications, and he is a frequent speaker at industry conferences such as Localogy, Brand Innovators, State of Search, SMX, and more.