Personalised Shopping and AI: The Future of Retail
George Iacovou 12:30 - 23 January 2024
Over the course of their lifetime, a person will have visited hundreds of different shops, both in person and online.
However, much of this shopping experience can often be overwhelming, with countless products to sort through and evaluate, many of which aren’t actually the products we want or need. Indeed, this is what shopping has always been at its essence; sifting through irrelevant products until we find something we like.
But what if there was a smarter, more efficient way to shop? What if every single product you looked at was displayed according to your distinct preferences? This is where AI shopping assistants come in. These intelligent tools, powered by artificial intelligence, have completely revolutionised the shopping experience, simplifying and enhancing it both in store and online. By harnessing the power of AI, brands are able to customise shopping experiences according to their customers’ needs and offer benefits such as curated recommendations, streamlined buying, and 24/7 availability. This turns what was once an onerous task into a truly meaningful and rewarding interaction between brand and consumer.
How does AI enhance the shopping experience?
By using the capabilities of AI technology, companies can collect data on customer behavior to learn exactly which specific products they want. This is based on complex machine learning algorithms that utilise behavioral and transactional data in order to develop a deeper understanding of customer needs. The collected and processed data is then used to put the right optimisation in place, recommend personalised products in real time, and ultimately create a satisfying, curated shopping experience that is tailored to every customer’s particular needs.
Taking e-commerce to whole new levels
AI is nothing short of a game-changer for the e-commerce industry. It adds a level of sophistication and personalisation to online shopping platforms that was once deemed inconceivable, and makes shoppers feel understood and valued. With AI, personalisation becomes more than just a bussword; it becomes about recognising every customer’s unique tastes, preferences and shopping behaviors, and engaging with them accordingly.
Here’s how brands can utilise AI for their online shopping platforms:
- Observe and analyse customer behavior, including learning their preferences, purchase history and shopping patterns and use that information to create personalised marketing strategies that resonate with buyers
- Offer tailored online shopping experiences that will delight customers and increase the likelihood of conversions and foster stronger brand loyalty
- Make recommendations that are relevant and curated so that consumers are more likely to buy
- Provide real-time customer support via chatbots so that customers will have the information they need without waiting on hold
A uniquely curated shopping experience
One of the things that many shoppers miss when shopping online is the level of personal contact they would have with a salesperson of a beloved store. Someone who knows their tastes, remembers their previous purchases, and makes recommendations they know their customers would like. By using AI, brands can replicate this individualised attention, and deliver a shopping experience that is curated to each customer. Beyond just product recommendations, AI-driven systems can help optimise the shopping experience through customised welcome texts, promotional materials, product categorisation, and even shop navigation sequences.
What are the benefits for online retailers?
Online shopping has skyrocketed since the start of the pandemic and is showing no signs of slowing down. There are plenty of reasons why shoppers would prefer to make their purchases online – from the wide variety of product options and flexible payment methods, to the sheer convenience of shopping from the comfort of your own home. Online shopping is most certainly here to stay, so online retailers would be wise to consider integrating AI technologies in order to upgrade the functionality of their e-commerce websites.
Here are just some of the benefits brands and retailers can enjoy by implementing AI technologies into their marketing strategy:
- Identifying optimal pricing: AI-powered software can analyse large datasets and make it much easier to hit the pricing optimisation sweet spot, allowing companies to change prices based on supply and demand and ultimately increase profits. For example, brands can receive alerts if a particular product on a competitor’s site is running low, and increase their own prices in response.
- Smarter search functions: AI makes it easier to respond to customer queries thanks to voice and image search tools and a more human-like understanding of what customers are seeking. This minimises searcher frustration, and allows retailers to recommend the right products at the right time.
- Consumer loyalty and brand connection: It cannot be understated just how much a personalised shopping experience that is tailored to customers’ needs can help with keeping customers happy and loyal. When an online store consistently provides customers with the products they want, e-commerce sales will also remain consistently high. Indeed, a recent McKinsey report found that companies that used personalisation enjoyed profits 40 percent higher than those that didn’t.
- Cross-selling and upselling: Virtual shopping assistants can recommend products based on what’s in customers’ carts, or on their previous purchase and browsing behavior, thus yielding additional sales opportunities.
- Cost and time savings: Chatbots and other types of virtual assistants now have impressive functionalities, improving their knowledge over time to become excellent digital butlers. Plus – they are available 24/7, so customers won’t have the face the frustration of not being able to contact support during a middle-of-the-night shopping spree. Customer support can therefore be seamlessly automated, taking the workload off customer support staff, leading to more efficient resource allocation.
- Streamlined buying process and inventory management: AI technology can be integrated with retailers’ inventory systems in order to keep a close eye on the supply chain and provide real-time checks. This allows companies to accurately determine how much inventory they need in stock, and reduce lost sales due to out of stock items.
As the digital shopping landscape continues to grow and evolve, more and more retailers and companies are turning to the powers of AI to transform their online shopping experience. Personalisation, recommendations and a positive customer experience will go a long way to helping your company stand out from the competition, and gain you some very loyal customers along the way.
George Iacovou, Co-founder of Base Element