Five Reasons You Need AI Solutions For Personalized Retail

April 1, 2019 5 Minutes Read

How well do you know your customers?

Do you send reminders to redeem their loyalty points or wish them on their birthdays, anniversaries?

Research shows that customers are likely to be loyal to the brand if they receive personalized offers based on their earlier shopping experience. That’s what Artificial intelligence and personalized retail relationship are all about.

That said, how are you going to bring personalization into your marketing strategies?

The first step is building your customer profiles by evaluating and analyzing your data, how it is being collected from various channels. That’s where a data-driven strategy will really extract meaningful insights and tailor the experience accordingly.

For retail giant Kohl’s, personalization means that customers are heard, recognized, engaged, and provided with a seamless journey. Understanding its customers, Kohl’s began targeting these personas with personalized communications and offers that are more likely to generate positive results.

For this to happen, the customer experience should be the right message, in the right channel, at the right time.

Personalization allowed them to do this better, creating a record five straight quarters of positive comps, and that customer engagement levels are at all-time highs according to Greg Revelle, chief marketing officer at Kohl’s.

Another path is to create recommendations by using purchase history. Build your customer loyalty by tailoring the content recommendations with personalization.

Sephora does this exceptionally well by emailing product suggestions based on the recent purchase. By explicitly mentioning that they used the customer’s purchase history to make their recommendations, they gained the customer’s trust and confidence in being transparent on how they use the collected data.

All this is going to push your AI budget spending, but it’s worth the additional expenditure. According to the IDC report on worldwide spending on Cognitive and AI systems, Retail & Banking are the big spenders in the AI market. IDC predicts worldwide spending on AI systems could reach US$35.8 billion in 2019, representing a massive 44 percent uptake last year. By 2022 that number is expected to double, hitting a total US$77.6 billion with a compound aggregate growth rate (CAGR) of 38 percent over the next three years.

Personalization is leading the Retail Brigade

Research giant, Gartner predicts that the AI based smart personalization search engine used to recognize customer intent will enable digital businesses to increase their profits by up to 15% by 2020. That power is due to AI’s ability to assimilate and categorize through a lot of unstructured data and use that information to gain more relevance among customers.

So, why should retailers Personalize?

Armed with customer data, many of the omnichannel retailers can discover hidden insights into their customer’s behavior through AI and ML that will help them enable personalization at scale. Analyzing this data in real-time can help retailers bridge the gap between their customer’s expectations and reality. Based on the engagement patterns, retailers implement this strategy seamlessly into their current operations with minimum disruption to their existing infrastructure.

Using the raw power needed by AI-based personalization tools, they can use those insights to automate cross-channel content distribution to individual users based on their behaviors, preferences, and interests.

Here are 5 reasons worth the effort to personalize:

Heightens the customer experience

Convenience is the crux of the whole customer experience. Consumers want customized shopping experiences that give them the same satisfaction they receive when shopping online or in a physical store.

Room for more impulse shopping

Being lured by personalized promotional content that leads to impulse buying is a great boost for sales.

Customers expect it

Keeping track of customer’s expectations & behavior and providing personalized offerings is expected by them considering the amount of information that’s collected from the various channels. When you target them with offers, they are more likely to be repeat customers because they enjoyed their shopping experiences.

Builds loyalty

Brand reputation and customer loyalty together build your sales and ROI. Personalized retail not only attracts new customers but also keeps them coming back for more. By consistently reworking on the offers based on the collected data, you can build this loyalty.

Value add to marketing strategies

Customers expect the marketing efforts to meet their wants and address those demands without their explicit mention. Through personalized retail, you can help them in their shopping experience by providing information & creating targeted promotions that focus on individual shoppers’ needs.

Final Thoughts

Personalized retail is the trend that’s increasingly becoming omnipresent within the retail landscape. The key to successful retail businesses is using data to create a meaningful customer relationship. Choosing and investing in the right technology matters and allows an increased personalization to drive the long term success for your business.

About Kloud9

Kloud9 helps retailers build an ecosystem on Data Science, Machine Learning and Cloud. As your trusted advisors in digital transformation, we are determined to build a deep partnership along the way. Let our Machine Learning and Cloud experts assist you in unlocking the value of your data in new ways and accelerate your journey to Artificial Intelligence.

Kloud9 gives you the insight into what your business needs and requires

Kloud9 gives you the insight into what your business needs and requires