It’s clear that the more you know about your customers, the better you can anticipate their desires and needs. Successful ecommerce retailers are those that have implemented personalization to individualize the customer journey for every single shopper. Over the last few years, personalization has also found its way into traditional, physical retail.
Offering customers an extremely personal, relevant and positive shopping experience at every point of their journey is essential to helping retailers drive customer satisfaction and lifetime value. In fact, companies that excel at personalization generate 40% more revenue than retailers that do not, according to McKinsey.
If executed well, personalization should be invisible. AI-based personalization is similar to a game of chess. The technology recognizes the customer’s behaviors, or “moves,” predicts the chain of all possible subsequent events and then acts accordingly – recommending products – so that it wins “the game” by maximizing sales.
Personalization is possible from the first click
With today’s consumers, loyalty is up for grabs. 75% of consumers tried a new shopping behavior during the pandemic, and comparing stores, products and prices is now part of their regular habits.
Retailers can make their store the one a shopper chooses by recognizing what products they are looking for, even before the consumer themselves make it known. How, you ask?
AI-driven personalization can learn new rules automatically and in real time. This personalization is based on clicks, shopping baskets, past purchases, external and internal search queries and engagement on banners. AI-powered applications continuously and independently collect this data, recognize patterns and regularities and then make personalization possible right from the first click.
Additionally, personalization can be achieved in the following ways:
Newsletter and app communications
Real-time recommendations can be utilized as a consumer interacts with a newsletter or a retailer’s app. Showing personalized content and product recommendations generates more value by improving open and click-through rates. In addition, interaction on these channels can trigger push notifications with relevant offers directly to a shoppers’ phone.
Image similarity
Artificial intelligence can also suggest alternative products through image similarity. Image similarity analyzes factors like color and shape, and combines these factors with other filters such as price range or brand, ultimately helping shoppers find the perfect item. Image similarity has been shown to reduce the number of abandoned carts or returned items, ultimately increasing sales.
Dynamic pricing
Comparison shopping is common. As a result, price is an important factor to a sale. However, it’s difficult for retailers with several stores to navigate factors that influence prices – including the supply chain, consumer demand and products’ relationships to one another. With AI-enabled dynamic pricing, retailers can react to internal and external factors, helping them to quickly and effectively establish optimized prices that are appealing to shoppers and meet their unique needs.
Use AI to deliver effective personalization
71% of consumers expect personalization, but true personalization is impossible to manage effectively without artificial intelligence. Across all customer touchpoints – including in store, online, newsletters and apps – retailers can be sure that unique, personalized scenarios reach shoppers.
Our AIR solution allows you to inspire customers with personalized shopping experiences, that also increase revenue and margins. Learn more about how we can help!
