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How retailers are achieving greater personalisation with AI

Published on 19 February, 2019

Customers are constantly consuming content: whether scrolling through Twitter, watching TV, or just travelling on the tube. When so many adverts, blogs, social posts and images are all competing for the attention of shoppers, creating personalised content is key to cutting through the noise.

But getting the complexities of personalisation right can be time-consuming for businesses. Fortunately, the growth of artificial intelligence (AI) technology gives businesses the opportunity to automate this process, improving the customer’s experience.

Many retailers have already begun to invest in AI and machine learning to deliver a more personalised service in a variety of ways. Let’s explore just how much of an impact AI is having on the retail sector.

Virtual assistants are part of the furniture

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Some businesses assume that consumers aren’t ready for AI, but what they forget is that many have already welcomed the technology into their homes. Virtual personal assistants, like Amazon’s Alexa and Google Home, are changing the way consumers shop. Now, they can order products via voice command, without ever having to click a button.

More than four million Brits have purchased smart devices for their homes so far. It’s likely many don’t realise they are conversing with an AI, and those that do are clearly comfortable with it. Consumers may not be as resistant to AI as businesses think; 26% of consumers said they would like to see more retailers implement AI tools in shopping apps, according to Apadmi’s Future of Retail Report.

Your own personal stylist

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In April 2016, Facebook launched a version of its Messenger app which allowed developers to create bots. Businesses started to create ‘chatbots’, which users can talk to and interact with, to a limited extent. By June 2016, 11,000 bots had been created; they enabled users to perform a variety of tasks, from finding the cheapest flights to ordering a pizza.

Now, many of the biggest brands have their own chatbots on a variety of instant messaging apps. H&M, for example, has a chatbot on Kik which acts as a personal stylist. While it is limited in its intelligence (it only lets users select from a few pre-defined chat options), it can recommend clothing items according to the information shoppers provide.

Sephora’s Kik chatbot aims to replicate the types of conversations customers have with their friends about products. The bot learns more about content that the user wants to see, by asking customers to take a short quiz when they begin the chat.

Chatbots have got a long way to go in the AI department, but plenty of retail brands are continuing to invest in them. One such business is the retail group Shop Direct, who wants its brands to deliver instant interaction to customers. Eventually, retail chatbots will be able to interpret natural language and facilitate a real conversation, rather than one limited by pre-defined options.

Assistance whenever you need it

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How many times have you gone into a department store, struggled to find what you’re looking for, and are unable to find a staff member to help? It’s a frustrating experience, and one that is likely to make you turn around and exit the store.

To solve this issue, American chain Macy’s partnered with IBM Watson to develop ‘Macy’s On-call’. In selected stores, shoppers can use their smartphone to chat to the virtual shopping assistant and ask it questions such as ‘Where are the toilets?’ The assistant is designed to become more intelligent over time and can analyse natural language.

Of course, many shoppers would no doubt prefer to speak to a real person, rather than refer to their smartphone, but it could prove particularly handy during peak shopping periods, when stores are constantly busy and staff are not readily available. Consumers shop around the clock – studies show the ‘prime-time’ for online shopping starts at 8:00pm. If they have an issue or question, they need to be able to speak to someone, which is why so many retailers are responding by creating an ‘always available’ experience.

It’s difficult (and expensive) to have real people answering shopper’s queries 24/7, so AI is the obvious answer.

See it, want it, find it, buy it

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Whether it’s the perfect shirt for that wedding next Saturday, or a new table for your living room, finding exactly what you want can be difficult. Let’s say you’re browsing Instagram and see someone wearing the shirt you’ve been searching for. Unhelpfully, they’ve failed to mention where they bought it – and frustratingly, won’t reply to your comments. How can you possibly find that same shirt?

Visual search tools are proving to be more and more vital to young shoppers. They allow customers to search for specific products using a photo – no more awkward keyword filters. Pinterest and eBay have already announced their own visual search tools and the latest retailer to include this function in their app is ASOS. Shoppers simply take a photo of an item of clothing they’ve seen elsewhere and the app instantly finds similar items the user can purchase right now.

This type of AI could have a huge impact on conversions, as shoppers can find the types of products they want much faster and easier. What’s impressive about ASOS’s visual search is its speed; shoppers don’t have to wait for the image to be analysed, and it’s surprisingly accurate, too.

Find the reviews that matter to you, quickly

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When you're trying to make a quick purchase, the last thing you want to do is read hundreds of reviews, but before you buy that pair of shoes, you want to check they will be comfortable and true to size. That's where tools like Feefo's Smart Themes come in. Using machine learning, Smart Themes automatically analyses product reviews to identify the topics and themes shoppers are mentioning in their feedback, such as size, fit, comfort, price, delivery, etc. 

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This allows shoppers to filter feedback for the topics they care about whilst on the product page. Such tech is proven to increase sales - The Perfume Shop saw a 13.5% rise in overall conversion rate!

The future of AI in retail

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AI in retail is still in its infancy, but there are some impressive features being tested and implemented. Many brands are keen to grow and invest in this technology, as they recognise the potential to add greater personalisation, relieve customer service teams from menial tasks and increase profits.

Generation Z (also known as post-millennials) present a new challenge for retailers. They have never lived in a world without the internet. They demand instant service, no matter what time of day (or night), and retailers must match these expectations. Realistically, the only way such demands can be met is through the use of AI.

While younger consumers are likely to be accepting of AI, older shoppers, who prefer to talk to a human being, may be more resistant. Rather than replace real people with robots, retailers must provide both options. For example, Burberry’s chatbot allows a customer service employee to take over the chat if the bot cannot answer the user’s question – an excellent way of providing both options.

It may take some time for both retailers and shoppers to accept that machines are going to take over some of the tasks traditionally completed by humans, but history shows that eventually, we always do.

If you need more information on current industry trends, get in touch with us today.