Shopping is no longer simply about the utility of exchanging money for a product. Consumers are wielding their purchasing power to demand retail experiences that are both meaningful and personalized, as well as convenient and ubiquitous. One way retailers are rising to the challenge of delivering these new shopping experiences is by leveraging technologies like artificial intelligence (AI).
While analyzing consumer data has been an integral part of market research for years — fueling product development, advertising and online searches — the predictive models and machine-learning advances that come with AI take shopper insights to a whole new level. With increased access to complex data, AI is enabling retailers to make shopping across all channels a smarter, more streamlined journey.
And it seems to be a welcomed change for the industry.
According to a research study commissioned by Apptus, 52% of fashion retailers will invest in AI within the next 12 months, with 19% planning to follow suit over the following 12 months. Though AI impacts many facets of the retail space, some of the top priorities for retailers leveraging AI are personalization, online merchandising and customer service.
There is immense potential for the ways in which AI will rewrite the retail playbook — from connecting with customers to delivering on security, convenience and speed. In today’s digital world, all aspects of the customer experience are being adapted at a rapid pace. Here are some ways retailers are using AI to keep up.
Power To The Chatbot
Whether it’s through a voice-activated digital assistant or a chat window on an e-Commerce site, chatbots are redefining customer service and introducing an entirely new way for customers to interact with brands. These human-like conversations don’t actually need a human element; instead, AI is used to respond to questions and issues and will only escalate a chat to a human when necessary. From Amazon Echo’s AI assistant, Alexa, to Sephora’s Kik chatbot, AI is being used to not only solve problems but provide meaningful one-to-one chat experiences with consumers.
As the shift towards mobile messaging and on-demand interactions increase, brands have an opportunity to deliver an automated, faster and more convenient customer service experience via chatbots. A survey from PwC revealed that 64% of consumers believe AI has the potential to cut down on the time it takes to receive answers while still remaining tailored to their personal preferences. It’s clear that chatbots are opening up a new channel for shopper engagement and acquisition by providing the types of unique experiences shoppers are craving.
Anticipating (Not Just Meeting) Needs
Retail is a data-rich industry, but that information is not always utilized in ways that can actually help streamline the customer experience. That’s where AI comes in — enabling retailers to better anticipate shoppers’ needs.
By collecting and tracking data related to a shopper’s order history and frequency, predictive analytics can be used to identify ordering patterns and estimate when they might want to place a new order. In that case, a retailer can set up a reminder email to their customer with a personalized promotion or even help them set up automated ordering. Not only can AI-powered practices like these build loyalty, but they also help provide value to shoppers by saving them time and presenting add-on services they actually need.
Harnessing user data and machine learning also helps retailers to better understand customer intent and capture more intelligent insights. This results in more personalized product discovery and recommendations based directly on the profile data, activities and behavioral patterns of consumers. AI-fueled deep learning also allows retailers to surprise and delight shoppers in a variety of new ways and across numerous channels.
The AI Approach To Security
In the coming years, AI is expected to help retailers build trust with their customers by supporting fraud prevention, increasing the accuracy of behavioral predictions and speeding up the checkout process. As highlighted in FuturePay’s The Big Ticket: What’s Stopping Shoppers? report, security remains top of mind for consumers, especially as they continue to take commerce across digital channels. In fact, 13% of shoppers admitted to abandoning an e-Commerce shopping cart because of security concerns. Whether it’s apprehension about storing payment information or having to jump through the hoops of time-consuming authentication processes, AI has the potential to alleviate some of the pain points that come with fraud prevention.
Through trusted partnerships with payment processors that rely on intuitive, human-like reasoning when evaluating transactions, retailers can quickly identify fraud and stop it before it happens. By leveraging AI, business owners can also provide their customers with the peace of mind that comes with knowing any inconsistencies in their purchasing behavior will be spotted and used to mitigate fraudulent transactions with speed and accuracy.
There’s still plenty of room for innovation and disruption in the retail space, but it looks as though AI and machine learning are leading the charge. Though these technologies may not be available to all retailers today, the growing shift toward AI-powered offerings provides a unique opportunity for collaborations and partnerships to help leverage AI across the industry.
Denise Purtzer is the VP of Business Development for FuturePay, an e-Commerce financing solution for the omnichannel shopper. FuturePay’s buy now, pay later option benefits businesses and consumers alike by offering shoppers instant credit while shopping online or on mobile devices.