Artificial intelligence in retail is just beginning to develop.
Artificial Intelligence has had a great year.
While many in retail have been using machine learning for years to streamline and automate back-end functions like replenishment and inventory management, new customer-facing applications of next-generation AI technologies are only just beginning to take off.
However, although AI is one of the hottest trending topics this year, many retailers are still not utilizing emerging AI solutions to the extent that they can better understand and serve their customers. However, those who use AI to solve specific challenges in their business are seeing tremendous results in their bottom lines.
Of course, there is more to AI than generative AI, such as computer vision, machine learning, and natural language processing. One of the quickest ways retailers put proven AI solutions to work this holiday season was to match e-commerce shoppers with the perfect gifts for their friends, family, or themselves.
AI is an ideal solution for scaling custom language for retail categories with thousands of SKUs, such as apparel, accessories, home goods, and cosmetics. For example, AI can better interpret a shopper’s intent and understand their unique style and preferences by matching “customer speak,” and every permutation of a shopping term or search query, with the most relevant products.
When retailers assign precise, customer-centric themes to their product catalogue, shoppers have a much easier time finding everything they want.
Without AI, retailers may at best be able to assign 3 to 5 attributes to a few products. To do it right – assigning multiple themes and trend-based themes to each item – is frankly an impossible task to do manually. When you use AI tools, these attributes suddenly become scalable across your entire product catalog.
One example of powerful customer-focused themes that are leveraged during the holidays are words associated with the latest trends. From popular macro trends to the world of TikTok and Instagram-inspired micro trends, trend-based product themes are a huge game-changer, especially among Gen Z and Millennials.
For example, in the lead-up to the release of “The Little Mermaid” and “Barbie” last summer, many people were searching for “Mermaidcore” and “Barbiecore”-inspired clothing, accessories, makeup and decorations. While some people were searching for these trends by name, others were looking for items that could be described with phrases like:
- Ocean blue shimmer eye shadow
- Girly pop prom dress
- Turquoise mermaid dress
- Aqua blue ruffled skirt
- Beach wall decor decorated with pearls
- Ultra feminine accessories in hot pink
As a retailer, you may have some Of those trends, trend attributes or descriptions, are included within your product category (this is what the retailer refers to as a “theme library”), but certainly not all of them (many of which are minute-by-minute trends, after all!).
This practice of enriching your catalog and e-commerce site with customer-focused product attributes, such as trends but also occasions and styles, can be applied to a timely example as well. At this time of year, many people shop with a specific occasion in mind. They’re looking for a “classic office holiday party outfit” or a “New Year’s Eve dress.”
We may see Gen Z shoppers searching for “luxurious, bold New Year’s Eve party outfits,” looking for dark velvet jackets and matching shorts. Millennials may be looking for a “comfy, unstructured, sheer and polished” look, based on their beloved Gilded Comfort trend.
Even before a consumer knows what they want, inspiration can come from a marketing email, an Instagram ad, or the latest TikTok release (hello #TikTokMadeMeBuyIt).
The upside of enriching product information with customer-focused language isn’t limited to site search and SEO/SEM. In fact, it benefits the entire retail process, from campaign development and item preparation to personalization and demand forecasting.
Let’s face it. . . Most of your customers aren’t getting ready for holiday parties by searching for “polyester/spandex blend embroidered vests,” but many are likely searching for “oversized sequin party vests.” By associating your products with both of these terms – and every variation between them – customers will pinpoint the items they want. . . Retailers will achieve their ultimate mission, which is to complete more sales.
Welcome to the exciting world of AI-driven holiday sales! As we approach the festive season, businesses are constantly seeking new ways to enhance customer experience and increase sales. With the power of artificial intelligence, retailers can now take a more customer-centric approach to their holiday campaigns, delivering personalized and targeted promotions that resonate with each individual shopper. This innovative technology is revolutionizing the way businesses connect with their customers during the holiday season, creating a more seamless and personalized shopping experience for all. So, let’s explore how AI is truly boosting holiday sales by putting the customer at the center of it all.