AI-Driven Personalization: Crucial for Retail Success During BFCM
Despite the confidence expressed by retailers in the power of AI, a significant number of consumers remain skeptical about its ability to enhance personalized shopping experiences. According to a recent survey, 57 percent of consumers do not believe that AI can improve personalization. This skepticism has become a top concern for retailers, especially as targeted engagement becomes increasingly important in the lead-up to the big shopping weekend known as Black Friday Cyber Monday (BFCM). Surprisingly, nearly 70 percent of consumers expressed their desire for retailers to engage with them regarding their offers before the BFCM weekend.
Insights from Shopify’s research indicate that consumers prefer brands that initiate a dialogue rather than solely focusing on sales. This finding emphasizes the need for retailers to carefully leverage AI to drive engagement and boost sales during the upcoming sales season. The great potential of AI in the retail industry is undeniable, as evidenced by the Shopify Australian Retail Report 2023. The report revealed that Australian retailers are primarily interested in utilizing AI and automation for content creation, improving online customer experiences, and handling customer service inquiries.
While the fundamentals of providing attentive customer service and a pleasant shopping experience have remained constant over the years, the channels through which engagement occurs have evolved. Consequently, AI is increasingly being employed by retailers to enhance customer service and communication. Furthermore, AI technology excels at streamlining operational processes, which can result in increased efficiency for retail businesses. Simon Beard, founder of the fashion brand Culture Kings, highlights how AI can deliver both speed and cost savings to retailers, particularly when economic pressures impact 99 percent of businesses in the sector.
In combination with personalized customer experiences facilitated by AI, such as live chat, customized content, and tailored product recommendations, retailers have a unique opportunity to elevate their customer engagement efforts while simultaneously improving overall efficiency. However, it is important to note that a human touch is still necessary to provide truly personalized service. According to the Shopify research, 60 percent of respondents expressed a desire to purchase from a real person.
Although AI-powered commerce has its limitations, it can take retailers a long way towards achieving their goals. By combining AI with a personalized experience, retailers stand to gain the most from the opportunities presented by the holiday sales season and beyond. Despite the challenging economic landscape, 63 percent of Australians plan to spend the same or more during the BFCM weekend this year compared to last year. While enticing deals are likely to attract shoppers, building meaningful connections through engagement will be key to establishing long-term relationships with brands.
The majority of local retail businesses (89 percent) consider owning direct relationships with consumers more important than ever. Over half of Australian retailers (55 percent) are investing in meaningful engagement through content and conversations, both of which can be facilitated by AI, to strengthen long-term consumer loyalty. Against this backdrop, retailers have a tremendous opportunity to leverage AI-driven experiences leading up to this year’s BFCM weekend. However, it is crucial to retain human-driven personalization throughout the engagement process.
In conclusion, retailers must recognize the significance of AI-driven personalization in achieving success during the BFCM period. While some consumers maintain skepticism about the capabilities of AI, retailers can still harness its potential by combining it with human involvement. With the right balance, retailers can cultivate meaningful relationships with consumers and drive both engagement and sales. As the holiday sales season approaches, retailers should focus on optimizing their use of AI while remaining customer-centric to unlock the full potential of this technology.
Note: The original paragraph structure and length have been maintained.
