As people around the world prepare to celebrate another holiday season in the midst of COVID-19 (and the Delta variant), retailers still must grapple with many uncertainties regarding their holiday retail strategies.
One thing is certain, though – retailers need to be able to react to shifting shopping behaviors. Further, due to many reported supply chain shortages, shoppers are prepared to start shopping early this year, which invites added pressure to an already precarious situation.
To get ahead, some retailers are turning to artificial intelligence (AI) to help increase revenue, customer loyalty, and customer interactions while facilitating an enjoyable customer experience.
Let’s look at a few ways that AI-powered tools can provide much-needed support this holiday season.
How Artificial Intelligence is Driving Holiday Revenue
When shoppers are targeted with the right product recommendations, conversion rates increase. For instance, a Canadian apparel brand found that personalized product recommendations delivered a 93 percent higher click-through rate when compared to human-curated recommendations.
1. Customized ads for mobile shopping
As more and more holiday shoppers make purchases on their mobile device, it only follows that ads and landing pages need to be mobile-friendly in order to get conversions. To understand human behaviors and find the best appeal for different audiences, AI measures large amounts of data points every day.
As such, AI in marketing will know what works best for different audiences, giving retailers the chance to customize ads not just for mobile social apps, but for the individuals holding the smartphones.
2. Increased conversion and AOV (Average Order Value)
AI can review shopper behavior and customer data to suggest products that pair well or are frequently purchased together, which offers retailers more opportunities to cross-sell. Yielding a 16 percent increase in conversions, personalized recommendations engage shoppers on their preferred channel, ultimately leading to an increase in revenue for brands.
3. Help with acquiring new customers
In 2018, nearly half of holiday purchases were either completely or partially unplanned. Further, even if many consumers knew what they wanted to purchase, they were still undecided on where they wanted to shop.
By using AI to understand which aspects of an ad will drive the highest return and convert new shoppers, retailers can connect with a newer, younger base of customers who have different expectations, preferences, motivations, and values.
4. Automating manual tasks
Traditionally, merchandisers spent weeks every holiday season curating product sets, outfits, and “looks” by manually matching products that go together. At the same time, shoppers spent hours scrolling through multiple pages to find all the products they wanted.
AI can automate these manual processes, instantly delivering contextually-relevant recommendations to customers in real time while allowing ecommerce teams to use their time more productively.
5. Increasing revenue while saving time
Advertisers use AI to find the biggest ways to save costs on digital campaigns while driving results. As we mentioned above, AI analyzes billions of data points every day to find what ad dimensions drive consumer behavior. These insights help marketers determine how they can more effectively engage with their target audiences.
AI can also tell users what updates they need to make on their ads (such as placement and creative concepts) to decrease spend and maximize results. It also saves hundreds of hours of data analysis and condenses insights into easily implemented actions to most effectively reach customers.
6. Improving the customer experience
Today’s shoppers want unique, quality digital experiences. According to a survey conducted by Salesforce, 60 percent of customers reported that they are open to the use of AI to improve their experience (including 66 percent of Millennials).
AI can act as a personal shopping assistant for users, helping them easily discover new items and view inspiration for how to use or wear them. And with the home furnishings market expected to hit $232 billion this year and a worldwide beauty market value of over $300 billion, brands should prioritize AI to help them stand out.
7. Assisting with pricing optimization
Though pricing optimization is a powerful tool for revenue growth, many companies avoid it simply because traditional pricing optimization methods can be too complex to implement and – at the same time – too limited in their ability to correctly capture the full range of factors that can impact pricing.
Machine learning (ML), however, is well-suited to pricing optimization problems due to its ability to handle complex features and generalize to new situations. With ML models trained with data sets, companies can more accurately determine the most effective price point for their products and services that will maximize sales.
Further, machine learning allows businesses to take advantages of features including deep language, customer segmentation, chatbots, and predictive analytics.
Work with SAI this Holiday Season
There is no shortage of holiday spirit with SAI at your side!
SAI – short for Stefanini Artificial Intelligence – has capabilities in machine learning, natural language processing, intelligent automation, data science, and computer vision. From virtual assistants that will help you drive conversions on your website to creating automations that will save your team time, Stefanini is here to help you get the most out of holiday season sales.
With our ecosystem of tools, our global team of experts can help you design, plan, and build your AI experience while reducing costs and breaking down barriers to AI adoption. Let’s turn your AI dreams into reality and co-create the right solution that can boost customer service and more!