The way consumers engage with retailers has drastically changed over the last decade. Changes in the infrastructure and societal fabric in which we live and changes in way retailers have curated their engagement with customers has forced retailers to transform their business models to meet the needs of hyper-connected shoppers who want a seamless, unique experience that fits their digitally-driven lifestyles.
The retail industry remains a leader in adopting the continuous cycle of action-feedback-insights-and-experience, constantly refining its knowledge of the wants and needs of consumers.
The availability of large-scale data, along with the use of Artificial Intelligence (AI) for finding consumers’ patterns and high-speed decision making techniques, has significantly increased the precision of customers’ insights and exponentially accelerated the speed of engaging with customers by creating a highly targeted experience.
From Mass To Targeted Engagement – A Curated Experience
Retailers have already made a significant foray into AI, developing models able to aggregate large volumes of data obtained from highly complementary yet heterogeneous sources. This is generating a growing number of data points about consumers to engage with, targeted consumer pools and a high probability of interest in the retailer’s offerings.
Amongst many other AI concepts successfully applied, reinforcement learning dynamically suggests prices that match supply to demand for non-staple offerings. Natural Language Processing coupled with Computer Vision and Deep Learning has helped organize the vast amounts of unstructured data on the likes and dislikes of consumers into insights. They also have provided large retailers with the ability to precisely identify groups exhibiting characteristics relevant to their offerings and allowed advanced retailers to move from mass to targeted engagement. By linking consumers’ actions to intents and leveraging this understanding, retailers are successfully able to nudge customers toward a desired outcome – typically a purchase.
Retail is already on a transformative journey to redefine the industry within the fourth industrial revolution, delivering on the vision of radical interconnection between digital and physical, between robots and humans.
Retail companies building their AI foundations to deliver interconnected, omnipresent and highly personalized experiences already face some of the early challenges – how can we increase the breadth and depth of data to quickly and accurately interact with consumers? As a society, what data access and insight creation do we think is acceptable and ethical? Where is the line between accelerating an action versus incepting a need that didn’t exist? In part two of this series, the transformation from targeted engagement to AI-enabled hyper personalized continuous shopping ecosystem will be explored.
Read the second half of this blog post, Part Two: Redefining The Retail Ecosystem, From Targeted To Personalized.