Olga Dogadkina is the co-founder and CEO of Emperia.
In the dynamic realm of retail in which change is the only constant, the influence of artificial intelligence (AI) stands as a formidable force poised for remarkable growth. As AI technology continues to advance, its effect on the retail industry is deepening, opening the door for a new era of shopping experiences that’s changing the retail landscape.
But there’s more to this AI-driven revolution than meets the eye. Personalization emerges as a crucial feature for brands savvy enough to take advantage of its potential. Personalization isn’t just a trending topic—it’s a game changer that benefits both brands and their customers.
A 2018 Accenture report brought this into focus, indicating that 91% of consumers express a greater willingness to do business with brands that recall their preferences and leverage them to deliver pertinent offers and suggestions. By embracing hyper-personalization, brands can create shopping experiences tailored to the unique needs of each customer. Imagine receiving product recommendations that feel like they were curated just for you or having your shopping journey guided by algorithms finely attuned to your tastes and shopping habits.
Yet, the benefits of personalization go far beyond just offering shopping recommendations. It can equip brands with the capability to fine-tune their inventory management, minimizing excess stock and contributing to waste reduction and enhanced sustainability goals, an important cause for Gen Z shoppers. In this era of data-driven insights, personalization serves as the gateway to a multitude of opportunities, nurturing stronger bonds between retailers and their consumers. A substantial 63% of companies witnessed an upsurge in conversion rates following the implementation of personalization strategies.
AI-driven personalization provides an opportunity to connect with customers differently. For instance, AI chatbot assistants have been profoundly influencing the customer experience, as evidenced by 74% of customers favoring chatbots over human interactions for resolving their basic inquiries. Also, as real-time online personal shopping is becoming more permanent, AI would allow shopping assistants to customize the selection on offer, heightening the level of one-on-one customer service and the consumer-brand relationship. In essence, the future of AI-powered tech provides opportunities for brands to experiment with hyper-personalization and fine-tune their offerings to meet the desires of their customers.
Gathering deep levels of consumer behavior also allows brands to optimize user satisfaction, minimizing cart abandonment, which becomes especially crucial in light of statistics indicating a high average abandonment rate of over 70% in 2023. For consumers, this means an entirely new level of engagement when it comes to online shopping. It’s no longer about scrolling through endless product listings—it’s about a shopping journey tailored precisely to their tastes and needs. The online retail experience will start to feel like it was built just for the customer, eliminating the frustrations of sifting through countless options that don’t resonate with their tastes.
But AI doesn’t stop at the online shopping experience. This technology is reshaping the way consumers engage with shopping across all touchpoints. It enables omnichannel personalization, an all-in-one seamless approach by which brands provide smooth movement between online and offline retail channels, offering customers a consistent shopping experience. Whether a guest meets the brand online or at its physical location, AI can provide retailers with insights into their customers’ shopping behaviors and preferences, allowing them to offer a high level of service and a more efficient sales process. When not in direct interaction with the user, brands can continually nurture their relationships with them by offering targeted discounts, using dynamic ads or dynamic mailers, which present tailor-made offers based on data collected.
As AI technologies start claiming their place in retail, the shopping journey is becoming not only personalized but also increasingly intuitive. AI-driven personalization technologies pave the way for retail environments that forge even deeper brand loyalty and defy the traditional transactional nature of online and offline commerce.
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