Retailers are entering a new phase of technological innovation — with artificial intelligence and machine learning at its core.
From targeting promotions to writing product descriptions to deep learning for price forecasting, generative AI — the next generation of AI — will drive business growth and give a competitive advantage to retailers that can capitalize on the fast-moving advances in these technologies, according to retail leaders and experts at NRF Nexus.
“As retail leaders, we need to think more than just incrementally,” said Ananda “Andy” Chakravarty, vice president of research, merchandising and marketing analytics at IDC Retail Insights.
“There’s a huge amount of opportunity here. We can think revolutionarily, and we can think in a way that actually allows us to grow our business dramatically and try to use it in a more creative fashion. Generative AI is powerful, and we need to start tapping into that power.”
Furniture retailer Ashley Global Retail has used generative AI to target promotions to those customers most likely to make a purchase.
Two years ago, Amanda Hall, director of pricing strategy and analytics with Ashley Global Retail, began working with Session AI CEO and co-founder Debjani Deb to leverage artificial intelligence and other new methods to engage and convert anonymous visitors to the company’s website into in-store purchasers through in-session marketing.
Most customers start their journey online, Hall said, and the goal was to give these anonymous visitors the incentive — or the nudge they need — to go to the bricks-and-mortar location where they are more likely to purchase a big-ticket item like furniture.
By focusing on “on-the-fence customers” instead of just putting a blanket promotion out into the marketplace, Ashley Global Retail has seen a 23% increase on conversions, Hall said. “For every one dollar we’ve invested with Session AI, we’ve generated 17 times that in incremental revenue for that on-the-fence customer,” she said.
Retail data is huge — Chakravarty shared that the industry drives more than 4,000 exabytes of data annually, a number that is growing exponentially by the minute. “Data truly is retail currency,” Chakravarty said, “and it is driving the value for your organization.”
But parsing through all that data will continue to be a challenge for retailers, a challenge that only AI and ML is going to be able to solve. “There is no other technology out there that is going to help us prioritize and automate that data,” he said.