Over the years, we have been bombarded with new ‘hot trends’ that promise to change our lives. But this over exposure means we are at risk of becoming numb to new developments that actually can have transformative benefits for businesses across all industries and consumers alike.
If you are alive and breathing, then you will have heard that artificial intelligence (AI) is the next big technology. What makes AI different from preceding fads is that AI is already being used and there is solid research documenting its impact. In fact, research from Accenture reveals that AI could double annual economic growth rates by 2035 and see a drastic change in how organisations interact with consumers.
The impact of AI will be widespread especially in retail. Retailers are already beginning to explore how AI and cognitive computing can make e-commerce smarter and more personalised – AI, in the form of machine learning, can enable technology solutions to better analyse heavy data sets, find common patterns and ultimately help retailers provide better, more relevant customer experiences. This will enable retailers to build closer bonds with customers in ways that were simply not possible before.
Forrester believes that investment into AI will triple this year alone as data analytics increase businesses’ access to data, broadening the types of data they can analyse to drive more sophisticated insights and personalised programmes. Analysts also expect that AI will drive faster business decisions in marketing, e-commerce, product management, customer experience and other areas to help close the gap from insight to action.
Why the fuss with adopting AI? Well, it’s simple. Customers want retailers to offer relevant and contextually responsive products and services that match their needs. After all, today’s customers have almost limitless choices in their discovery and inspiration of new products, and are not constrained by time of day or location when making purchases.
Half the battle for many retailers is making the decision to start personalising. Too many fear that it will be either too complex or time consuming – two misconceptions we commonly hear. Whilst many retailers are successfully optimising their online experiences, fewer have started personalisation in any meaningful way – something highlighted by RetailWeek’s recent research. The danger of not going beyond optimisation and segmentation towards 1:1 personalisation, is that sooner or later your competitors will, enabling them to engage at a deeper level with your customer base.
The technology may seem daunting, but technology providers and sector experts are there to help, providing the right advice and enabling brands to be effective at using their customer data to improve business performance.
Personalisation using AI in the form of machine-learning has distinct advantages. It can make individual decisions about which experience to show each individual customer. Marketers can try to do this manually to some effect, but machine-learning offers the benefit of scalability, removing the need for retailers to manually create an ever increasing number of experiences for progressively smaller segments.The technology ensures that each customer is served the right experience in each moment, providing each customer with the best experience possible, and brands with the best possible business result– a true win-win.
It is important to remember that AI-driven personalisation isn’t a standalone approach. It is complementary to segmentation and optimisation. Yes, AI is a vital additional component, but rather than replacing the other elements in the hierarchy of personalisation, it adds to them.
Optimisation and segmentation will always have a role to play in any retailer’s overall personalisation programme, but AI augments these processes by providing a new level of context about consumers and their shopping habits.
It’s not just the retailing industry that is being influenced by AI. It runs much deeper than that. Customer service can use data and insights driven by machine-learning personalisation to better understand customer needs and provide unrivalled customer experience. In the future we will certainly see inter-business departments such as logistics, operations, IT and purchasing all utilising the power of AI to get better results, as quickly and as efficiently as possible.
It seems AI is set to revolutionise every industry. Businesses need to act now to utilise the power and insight AI can offer and take their personalisation efforts to the next level. By recognising AI as not another fad, retailers have an opportunity to realise the promise it holds to transform both the customer experience, and business as we know it.