Artificial intelligence is set to change the face of retail, yet only a few brands are capitalising on its current potential. Budget is a key barrier for marketers, as the computing technology required to make sense of unstructured data sets can be cost prohibitive for smaller brands. Those contemplating an investment may be hesitating due to a limited understanding of what AI is capable of delivering today, or they could be concerned about the lack of concrete results from brands already leveraging the technologies.
Clearly, the concept of AI in retail is still relatively new, but experts enthuse about the future possibilities. Machine learning, a component of AI, is already empowering brands to build a more intimate connection with their consumer. ML algorithms can be applied to large data sets to track patterns in customer behaviour and preferences so that retailers can deliver personalised messaging in real time.
Looking ahead we can expect even more sophisticated tools such as digital shopping assistants with face and voice recognition, that know who you are and what you like to buy as you enter the store. AI chatbots and visual search will become increasingly popular over time as the technology becomes more accessible to marketers and consumers learn to trust it.
Here are a few examples of pioneering brands that are already unlocking the power of data and AI in the retail space.
1 – Starbucks
The brand has developed a Digital Flywheel program, which uses AI to marry customers’ buying habits with contextual information, such as the weather and time of day, in order to deliver real-time personalised notifications. For example, if someone buys a coffee every morning they could receive a promotional coupon on their mobile for an end of week pastry treat, or they could be sent money off a hot chocolate on a cold, wintery day. The brand is also changing the way consumers can buy their product with the mobile app, enabling them to order directly from a push notification or text if they are in the vicinity of a Starbucks.
2 – North Face
In 2016 outdoor clothing retailer North Face began to experiment with powerful AI tools. It implemented Watson, IBM’s cognitive computing platform, to deliver a personalised shopping experience for its online customers. It asked shoppers browsing for coats a series of questions, such as where they will wear the coat, in order to provide a relevant recommendation. The technology acted as an online sales assistant, helping the customer select the most suitable coat from the brand’s extensive catalogue.
3 – Knorr
Food brand Knorr also used the cognitive computing platform in its recent Love at First Taste campaign. A ‘Flavour Profiler’ was integrated into the brand’s site comprising a simple quiz. Once completed the customer received tailored recipes that suited their flavour personality. The technology has identified flavours in recipes and products then matched them to each flavour personality. The activity was amplified through other channels such as social media delivering a highly engaging campaign.
4 – Net-a-Porter
Luxury e-commerce platform Net-a-Porter is preparing to launch a new AI tool which is designed to recommend products based on where consumers will be wearing them. Customers will be able to select a location they are travelling to, or an event they are attending and the tool will suggest personalised outfits. Online shoppers will also be recommended products based on their previous orders or other selections. The brand is investing heavily in technology and has recently created a tech hub in London to explore new ways of implementing AI.
5 – Burberry
Renowned British brand Burberry has been investing in the development of AI tools for a number of years. It invites customers to provide data via its loyalty program then uses this information to create a more enhanced in-store experience. Machine learning models analyse previous interactions with the brand, enabling the shop assistants to suggest products that are tailored to the individual customer. If a customer had recently bought a Burberry coat online, for example, the sales assistant would know this via the brand’s app and be able to recommend an accessory that is popular with other buyers of the same coat.
At present we are just scratching the surface of what AI can deliver. The technology is still maturing, but we see it already enabling brands to connect with their customers in a more targeted and personalised way. For marketers to benefit from its many capabilities more investment and bravery will be required in the coming months and years.