AI - the secret to instilling customer loyalty
By Simon Farthing – Director of Global Strategy and Insights, Monetate
Artificial Intelligence (AI) is transforming industries in a variety of ways. Engineers are enabling teams of marketers to mine valuable data insights, helping companies drive efficiencies and make lucrative predictions. Yet, when it comes to retail, uptake has so far been limited.
This is something highlighted by Microsoft’s recent report, finding that UK retailers are lagging behind other industries when it comes to integrating AI into their operations. When fully utilised, it can enable brands and marketers to create truly unique customer experiences, increase engagement and bolster business outcomes. Neglecting these insights however, will mean missing out on these opportunities to competitors.
But how exactly can AI benefit retailers and deliver on this promise?
Let’s start with understanding the customer journey. Christmas shopping is a great example as it’s notoriously the busiest time of year for retailers. With consumers flocking to the internet in search of the perfect gift and seeking inspiration wherever they can find it, the weeks leading up to the 25th December can yield great insights.
However, despite this high concentration of engagement, it can prove a challenge to convert gift shoppers into repeat customers. Whilst they may find the item they require, this doesn’t necessarily mean they will return once all the excitement is over, or even the following year. In fact, according to the Ecommerce Quarterly Report, only 1% of customers acquired during the holiday season are present on the same site a year later.
That is, unless there is a means of building upon what is learnt during the gift-buying experience. Enter AI. It can enable retailers and brands to explore the ins and outs of the customer journey when it matters most. For example, by creating robust profiles of normal shopping behaviour, it can help draw shoppers back by tailoring their experiences to reflect their preferences and recent online activity, rather than just one-time gift-buying habits. By being able to see the full picture, brands can make the most of shopping peaks and use them as an opportunity to instil long-term customer loyalty.
What many retailers may also be unaware of is that some of the tools needed to access this valuable information about their customers are right under their noses. With many brands attracting thousands, if not millions of visitors to their sites every month, they sit on a wealth of data, gleaming with insights into their customers’ shopping habits. If they know for example that a customer is returning to a certain kind of product for the third time in a two-week period, it opens an opportunity to make recommendations that could translate into new activity.
Whether retailers are analysing the history of a person’s purchases, the frequency, or even the device they’re purchasing from, more information translates to them being able to create a smoother customer journey. Data empowers retailers by helping them decode shopping habits and therefore target customers in the most relevant way.
But where do brands begin with implementing this kind of technology?
Personalisation platforms can help both marketers and retailers personalise via product recommendation capabilities. Using AI and machine learning, the platforms individualise product recommendations and evaluate hundreds of visitor data points. Real-time AI weeds out the most fruitful data, allowing brands to action this as and when they see fit.
According to Econsultancy’s Digital Trends 2018 report, personalisation features lower on the list of strategic priorities for 2018 than other areas for organisations. However, implementing technology such as this, is a simple step brands can take to improve customer experience and drive loyalty, and can often mean the difference between a customer leaving a store or website, or returning.
There will be consequences for retailers that don’t wake up to this increasing demand for a personalised experience, and the technology needed to make this possible. Whilst driving people to your site or store around peak times such as Christmas may have appeared to be the most challenging aspect of commerce in the past – keeping them there once the excitement is over is the challenge of today. Those retailers that remain blind to the habits of their consumers risk losing out to their competitors and will struggle to maintain the audience they’ve worked so hard to engage in the first place.