Artificial intelligence (AI) is all the rage today, but many businesses are missing the mark when it comes to integrating the right technologies to maximize their unique KPIs.
The key to integrating any type of AI into a business is an in-depth understanding of the problems the technology is being asked to solve. This understanding will greatly help business leaders sift through the "noise" of the latest and greatest technologies and determine which solutions will improve key performance indicators (KPIs). In retail, two of the AI use cases that have proven to be impactful are personalized recommendations and price optimization.
GK understands the needs of businesses in the retail, grocery, hospitality and convenience store markets. After years of collaboration with these businesses, GK has developed a set of AI-driven solutions, called AIR (Artificial Intelligence for Retail), and personalization and dynamic pricing are seen as two of the key steps to driving enhanced business metrics.
Let's discuss how GK's AI-driven price optimization (also known as dynamic pricing) and personalization tools improve common retail KPIs.
Increasing Customer Lifetime Value With GK AIR Personalization
A major factor in the long-term success of a retail business is customer loyalty. In fact, retention efforts can cost anywhere from five to 25 times less than acquisition strategies.
A popular way to bolster retention and foster loyalty is to integrate personalization tactics that ensure the shopper's needs are always met. And the more intelligent, or AI-driven and data-backed, the personalized recommendation engine is, the more effective these tactics can be.
Machine learning and artificial intelligence can bring retailers closer to their customers. GK AIR Personalization reviews all customer data including clicks, basket sizes, purchases, searches, in-store transactions and more, to learn about the customer's typical shopping journey. From there, the solution will recommend products, promotions and experiences that will enhance their experience.
What's more, these recommendations automatically adjust as a customer's behavior and preferences change. If a personalized recommendation for the shopper's frequently purchased shampoo is ignored, the engine will learn from this and suggest alternative engagement strategies for that shopper throughout the online or in-store journey.
By increasing the value your brand can provide to loyal shoppers, personalization can greatly improve top KPIs. In fact, GK AIR Personalization has improved retail KPIs such as revenue, click and purchase rates, conversions, customer turnover, customer lifetime value and more.
Optimizing Margins with GK AIR Dynamic Pricing
Another way to retain loyal customers is by offering the best prices. Fortunately, the "best" price doesn't always mean the lowest. With GK AIR Dynamic Pricing, retailers can determine the elasticity of prices for every SKU across their assortment.
The prices at which consumers will purchase vary greatly depending on supply and demand, prices of complementary and substitute products, competitors' prices, channel and more. AI replaces the manual trial and error of price setting by automatically considering all relevant factors and determining the best price for every item in the retailer's assortment. What's more, when used in-store and paired with electronic shelf labels, prices can be optimized across the entire retail store in seconds based on live, real-time pricing parameters.
GK AIR Dynamic Pricing enables retailers to protect their margins while still selling their products at prices the shoppers are comfortable with. In a grocery environment, dynamic pricing can even improve sell-through rates for products with upcoming expiration dates by lowering the price point of specific items. In fashion, this same concept is applied to optimizing the markdown process. Overall, GK AIR Dynamic Pricing improves sales, gross margin and shopping frequency.
Incorporating Effective AI Into the Retail Strategy With GK
There may be many places to start when it comes to adding AI into a retail strategy, but dynamic pricing and personalization are two effective use cases that any retail business can incorporate to see real results today.
GK makes the whole AI process quick and easy while maximizing the benefits these solutions can bring. If you're interested in GK AIR Personalization or GK AIR Dynamic Pricing, reach out to us for a demo today.
