There has been a lot of hype around various trends emerging from the last few years and most of them come with the promise of revolutionising the way people live. It’s the same old story but with the constant over exposure of emerging technologies, people risk ignoring new innovative developments that actually could transform the way they live and do business.
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.
Monetate’s hierarchy of personalisation appreciates the uniqueness of each customer’s wants and needs. We don’t only see segments, we also see individuals, and believe that every retailer should harness the ability to truly understand their customers and recognise the intention behind each interaction.
This simple diagram below evolved from a series of discussions that Monetate had with its customers about the challenges they have related to personalisation.
The pyramid is an illustration of the three different, yet connected activities, all of which contribute to delivering personalised experiences. While we believe getting to true 1-to-1 personalisation is a journey, the layers are not necessarily incremental steps. In fact, more often than not, when we speak with e-commerce marketers, we find that they are utilising one or two of the approaches concurrently.
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, inter-business departments such as logistics, operations, IT and purchasing will all utilise the power of AI to get better results, as quickly and as efficiently as possible.
It is paramount that AI is recognised as not just another gimmicky piece of technology, but a force set to revolutionise every industry. Businesses need to prepare themselves and think about utilising the capabilities and insight AI can offer and make their personalisation strategy more efficient. The retailers in particular, have the opportunity to make good use of the technology to transform their business operational efficiencies and also the customer experience.
Sourced by Simon Farthing, director of Global Strategy and Insights at Monetate