How Artificial Intelligence is Driving Holiday Shopping Revenues
As retailers prepare for yet another pandemic-altered holiday shopping season, there are a higher-than-usual number of uncertainties they must address to best serve their customers and drive sales. The good news is that sophisticated and increasingly accessible technology solutions are making that task easier. In particular, artificial intelligence (AI) has emerged as a valuable tool that can help with everything from influencing shopping behaviors to addressing supply chain shortages. Here’s how:
Acquiring New Customers
By using AI to understand which aspects of an ad are most likely to convert new shoppers and drive the highest returns, retailers can connect with a newer, younger base of customers who have different expectations, preferences, motivations and values.
Curating and Automating Tasks
AI tools can save merchandisers and their e-commerce partners time and resources by curating product sets, outfits and “looks,” and automatically and effectively matching products that go together — and by instantly delivering contextually relevant recommendations to shoppers in real time. Using shopper behavior and customer data to suggest products that pair well or are frequently purchased together, AI can provide retailers with more opportunities to cross-sell and upsell.
Customizing Ads for Mobile Shoppers
With growing numbers of holiday shoppers making purchases on their phones and other mobile devices, it’s essential that ads and landing pages are mobile-friendly to drive conversions. AI can measure vast amounts of daily data points to evaluate what works best for different audiences, giving retailers the chance to not only customize ads for mobile environments, but also for the individuals holding the devices.
While pricing optimization can be a powerful tool for revenue growth, traditional pricing optimization methods are often too complex or suffer from inherent limitations in their ability to correctly capture the full range of factors that can impact pricing. With the machine learning capabilities of leading AI tools, however, models trained with data sets can help retailers accurately determine the most effective price points to maximize sales and margins.
Increasing Conversion and Boosting Average Order Value (AOV)
When shoppers are targeted with the right product recommendations, conversion rates increase. One Canadian apparel brand found that personalized product recommendations delivered a 93 percent higher clickthrough rate when compared to human-curated recommendations. Personalized recommendations engage shoppers in their preferred channel, ultimately leading to a boost in AOV and an increase in revenue.
Driving Effective Digital Campaigns
Advertisers can use AI to find the biggest and best ways to save costs on digital campaigns while driving results. As referenced above, AI tools are capable of analyzing literally billions of data points every day to determine what ad dimensions drive consumer behavior. These insights can help marketers determine how they can more effectively engage with target audiences, giving retailers the information they need about how to modify ad placements and creative concepts to decrease spend and maximize results.
Improving the Customer Experience
Shoppers are increasingly prioritizing unique, high-quality digital experiences. A Salesforce survey found that 60 percent of customers reported that they're open to the use of AI to improve their experience (including 66 percent of millennials). To that end, AI can act as a personal shopping assistant for users, helping them easily discover new items and view inspiration for how to use or wear them.
The bottom line is that the collection and analysis of data to not just respond to preferences, but to drive behaviors is revolutionizing the shopping experience. And as AI tools continue to become more effective, affordable, and accessible for retailers of all sizes, they will be better equipped to make the most of the critical holiday shopping season. And there’s nothing artificial about that.
Mary Mattingly is a solutions marketing specialist at Stefanini, a $1 billion global technology company specializing in digital solutions, with locations in 41 countries across the Americas, Europe, Australia and Asia.
Mary Mattingly is a solutions marketing specialist at Stefanini, a $1 billion global technology company specializing in digital solutions, with locations in 41 countries across the Americas, Europe, Australia and Asia. In her role, Mary creates content, facilitates brainstorm sessions and manages projects for artificial intelligence, agile and digital marketing solution areas.