How is AI empowering the customer experience?
As more people prefer the convenience of online shopping, how can retailers get customers off their sofa and into their store?
The peak value of online sales has increased from around £1.5 billion in 2016 to just over £2 billion in 2019. At the same time, The Guardian reports that the high street has seen a 10% decrease in traffic over the last seven years.
Such observations suggest that the future of the bricks and mortar retail industry is beginning to look bleak, and could explain the increasing number of retailers that are resorting to instore AI technology to get customers through the door.
On a more positive note, a recent study by BigCommerce reveals that 75% of consumers are more likely to buy from a retailer that recognises them by name, and makes recommendations based on their past purchases – this is where AI comes into its own.
AI on the high street
AI gives retailers the means to collect customer data in order to provide a more personalised shopping experience. Whether it’s in the form of a virtual reality mirror, or a device that detects your skin pigmentation, AI is already being successfully utilised by several high street stores.
Let’s take Boots No7 Match Made Service as an example. Back in 2013, Boots began using a device that solved the age-old issue of people wasting money on purchasing foundation that didn’t match their skin tone.
Not only did its skin colour recognition service bring more customers into the store, it also allowed Boots to recommend and cross-sell other makeup products that match a customer’s skin tone, including lipsticks and concealers.
Big brand names such as Topshop, Timberland, and Superdry have already tested virtual reality mirrors in some of their stores. And a 2019 study conducted by Grand View Research predicts the VR mirror industry will see an annual compound growth rate of 25.6% between 2019 and 2025.
Gap is one of the latest big brand names to take virtual reality one step further. It invested in the services of Avametric, a company that has developed a virtual dressing room app, allowing customers to see how clothes look on different body proportions.
As technology becomes smarter, virtual reality will become part of wider marketing campaigns. Virtual reality mirrors and apps will collect data on customers preferences, and stores will be able to create tailored marketing campaigns based on both previous purchases and try on data.
If used wisely, retailers will be able to entice customers through the door with items that exactly match their style and needs.
What does this mean for small high street businesses?
Well, if you own a shop, or you're looking to open a shop, you'll need to consider what experiences you can offer your customers to get them through the door.
If investing in advanced AI and virtual reality technology doesn't quite harmonise with your business plan, consider starting a loyalty programme.
Set up customer accounts on your electronic point of sale (EPOS) system, and collect their sales data each time they make a purchase.
The system will then use that data to learn customer preferences and send them targeted promotional emails.
Above all, ensure you offer your customers a personalised shopping experience, even if it’s just remembering their name, or knowing their style preferences off the top of your head.